Business Ukraine February 2016

February 2016

UKRAINE’S ENERGY FUTURE? American company RENEWABLE ASSETS plans Ukraine market entry as country’s alternative energy industry attracts growing international investment interest

Also inside: Monthly American Chamber of Commerce in Ukraine Newsletter

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BUSINESS UKRAINE: FEBRUARY 2016 As Ukraine seeks to increase energy independence and identify alternative supply options, alternative energy is becoming a strategic priority and a potentially attractive investment opportunity.

America’s Renewable Assets is the latest international energy company to announce Ukraine market entry plans.

Turn to page 6 for more on the appeal of Ukraine’s renewable energy sector.

February 2016

UKRAINE’S ENERGY FUTURE? American company RENEWABLE ASSETS plans Ukraine market entry as country’s alternative energy industry attracts growing international investment interest

Also inside: Monthly American Chamber of Commerce in Ukraine Newsletter

Where would Europe be today if the EU did not exist?

The upcoming referendum in the Netherlands over the EU-Ukraine Association Agreement is about much more than free trade ties between Brussels and Kyiv. The Ukrainian agreement is an innocent bystander in a far larger battle for the soul of Europe that sees advocates of greater continental union pitted against national forces intent on stopping what they regard as the undemocratic Brussels bulldozer. Ukraine is merely guilty of particularly bad timing.

The Dutch groups who initiated the referendum have millions of like-minded allies in every single EU member state. The influence of these anti-EU forces has increased enormously over the past decade of economic stagnation and mounting immigration angst. For the time being, they remain political outsiders, but the sense that the dam is close to bursting continues to grow. A breach in the Netherlands could lead to a systematic crisis throughout the EU. Empires have come crashing down over less.

Such doomsday predictions will be music to the ears of all those who view the European Union unfavourably, but it is worth considering what is potentially at stake when Dutch voters go to the polls. Opponents of the EU seem to think we can simply turn back the clock to the days of pre-Brussels national sovereignty while keeping all the economic and security dividends that the EU has secured for the continent. In this idealized tomorrow, the liberated nations of Europe would maintain free trade ties and continue living in peace and harmony while pursuing their own national interests. You do not need to be a celebrated historian or international economist to find such expectations unrealistic. While it is unlikely that former EU member states would begin declaring war on each other, it does not take a great leap of the imagination to picture a future Europe of sealed borders, trade wars, increased militarization, and rival blocs.

Nor do we necessarily need to speculate about potential future developments.

It is enough to consider where Europe would be today if Russia had launched its hybrid invasion of Ukraine without having to contend with the EU. Unrestrained by the threat of a united EU response, the Kremlin would have been February 2016

far more likely to attempt a full-scale occupation of Ukraine and to menace the immediate neighbourhood. Across the continent, divide and rule would have been the order of the day, with individual European countries wide open to the carrot and stick of Russian energy enticements and military blackmail.

Unopposed by a disunited Europe, Russian aggression would succeed in setting the political agenda for at least half the continent. The hopelessly exposed states of Central and Eastern Europe would line up to seek their own accommodations with the Kremlin, albeit in many cases through gritted teeth. The aftershocks of Russian military aggression would reach all the way to the Atlantic and the shores of the North Sea, leading to rising arms spending, curtailed civil liberties, and the politics of fear. We would now be witnessing the eclipse of the entire democratic value system that post-Cold War Europeans take for granted.

The complaints levelled at the European Union are valid. Certain aspects of the EU are undeniably undemocratic, while economic diversity within the union encourages abuses that weigh disproportionately on the wealthier members.

These concerns will be enough to persuade many Dutch voters to support the ‘no’ camp in the coming referendum, but they obscure the historic benefits the EU has brought. The dream of a united Europe was born amid the ashes of WWII as a way of preventing the continent from ever descending into war again. Against all the odds, it has succeeded.

Today’s Europe enjoys unprecedented peace and prosperity, and the European Union must take much of the credit. It is certainly a flawed institution, but the alternatives are infinitely less appealing. Anti-EU protest voters should be careful what they wish for.

Peter Dickinson Chief Editor, Business Ukraine magazine 5

Sunny outlook for Ukrainian solar power sector Investors attracted to renewable energy industry as Ukraine looks to rethink national energy strategy Ukraine is currently undergoing an energy sector revolution. Geopolitical considerations have forced the country to urgently reduce dependency on Russian energy imports, creating the need for greater fuel efficiency and more reliable sources. The move away from heavily subsidized domestic energy markets – a key element of the broader economic reform program - is also driving the search for alternative energy options, creating new demand in what was once a relatively moribund sector of the Ukrainian economy.

This dynamic environment is attracting growing interest from international investors specializing in alternative and renewable energy. American energy company Renewable Assets has recently confirmed plans to enter the Ukrainian market in 2016.

The Virginia-based company already operates in Africa, Asia and the Caucasus region, and is involved in the full spectrum of sustainable, renewable energy spheres including solar, thermal, wind, waste-to-energy and water resource projects. Initial plans for Ukraine focus on developing the country’s solar power capacity. Business Ukraine magazine spoke to Renewable Assets President and CEO Michael Page about the potential of the Ukrainian renewable energy sector and the opportunities it represents for international investment.

What attracts you to the Ukrainian energy market?

In today’s geopolitical climate and with all the issues currently facing Ukraine, the need for inexpensive and sustainable energy has never been greater. The recent power outages in certain regions of the country and the limited supply of natural gas have made the

necessity of identifying alternative energy sources abundantly clear. Thanks to these factors, the Ukrainian market is perfectly poised for the infusion of clean, renewable energy sources, especially with the additional introduction of energy storage solutions.

as the government of Ukraine truly embraces the need for these sustainable sources of energy and starts to adapt more policies that support such developments, solar power can eventually become the principal source of energy for the entire country.

What role can you see solar energy playing in the development of the Ukrainian energy market?

I believe that solar power, and not just solar but all forms of renewable energy including wind and bio-mass systems, can play a crucial role in Ukraine’s ability to achieve energy independence from other countries. Today, Ukraine is still dependent on costly imports of fossil fuels in order to generate the country’s required energy supplies. In the short term, solar power is a stepping-stone towards achieving this independence. As renewable energy solutions gain more acceptance, and

How does the Ukrainian energy market compare to other emerging energy markets where you are active?

To a certain extent, Ukraine is not particularly different from other emerging markets.

Which geographical regions of Ukraine offer the greatest potential for solar energy development?

While Ukraine is geographically located a little bit above 45 degrees latitude, it is still well within the necessary parameters for solar insolation. Central and southern Ukraine are the primary regions, however some of the regions closer to the Donbas in the east of the country are also key areas for consideration.

Another important factor, especially for large ground-mounted solar power systems, is the availability of suitable land. Reclaimed land, brownfields, sites that once housed large industrial complexes, and capped landfills are all very good potential sites for consideration.

These types of properties generally have little commercial value but can serve as great locations for certain types of solar facilities.

What are the key regulatory issues affecting your Ukraine market entry and future activities?

A lack of political stabilization in the energy market has posed some of the biggest challenges to the successful development and implementation of solar and other forms of renewable energy. The Ukrainian parliament has made some important progress in this regard by removing certain requirements that had previously limited the appeal of the Ukrainian solar market for foreign investors. Requirements relating to local content, or the limiting of materials and equipment for projects to materials produced in Ukraine, had a negative effect on the market.

Nobody in our industry wants to limit the ability of Ukrainian companies to manufacture equipment for renewable energy projects. However, at the moment the availability of such ‘Made in Ukraine’ products is very limited and, to a certain extent, below the standards required by our investors and funding sources. I hope local companies will eventually be able to re-engage in the manufacturing of certain products for the renewable energy sector and there will be equal benefits for all parties.

“In today’s geopolitical climate and with all the issues currently facing Ukraine, the need for inexpensive and sustainable energy has never been greater.”

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cover story

Upon entry into any new energy market, there is always the need to engage with local government and institutions in order to educate them on the benefits of solar energy.

There is also the need to assist the authorities in establishing the appropriate rules and regulations that can succeed in making investors interested and comfortable with entering the market. Ukraine is actually a fairly advanced country in terms of the understanding and knowledge of what it takes to make this a successful market place for renewables. The biggest challenge – and this is not limited to Ukraine - is the stabilization of the government. While Ukraine is a very exciting and viable market, investors who are currently looking to enter the Ukrainian market still want to receive the necessary assurances. They need to know their money is safe. They want to feel confident that their involvement is seen as a long-term relationship and not just a one-off investment.

What is your approach to the security challenges currently facing Ukraine and how have you integrated this into your market entry strategy?

Naturally, security is a concern. While most of the areas with the highest levels of risk and tension are in the east of the country and the Crimea region, there are still heightened concerns about the security situation in the rest of Ukraine. For the most part, the areas of interest to us are relatively stable. This includes the central and western regions of the country. Nevertheless, the potential risk remains of foreign intervention in Ukraine’s affairs. This risk must be mitigated with certain instruments including political risk insurance from institutions such as EX-IM Bank or OPIC for American investors.

In regards to personal security concerns for employees, I am not overly concerned about security risks facing installation crews. Renewable Assets has a very specific method

of conducting business in foreign countries that includes the use of local labor and suppliers for all our projects. We are not here to reap all of the financial benefits from our projects for ourselves. We are here to bring value to the country and to the local communities where our projects are constructed. This is a partnership between Renewable Assets and the local communities. I believe this approach helps to mitigate certain risk considerations.

About the interviewee: Michael Page is President and CEO of Renewable Assets February 2016

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interview

Netherlands-Ukraine ties in the spotlight Interview: Ambassador Klompenhouwer on free trade opportunities and Dutch referendum Spring 2016 is poised to be a particularly dynamic period in bilateral relations between the Netherlands and Ukraine. Mid-March will see a high-level business delegation arrive in Kyiv led by Netherlands Minister for Foreign Trade and Development Cooperation Lilianne Ploumen. This will be followed by a major Netherlands-Ukraine Business Forum in The Hague at the end of March.

These events come on the eve of a Dutch referendum on the Association Agreement between the European Union and Ukraine which is scheduled to take place on 6 April.

The EU-Ukraine Association Agreement is the first issue to be put to national referendum in the Netherlands since the passing of the Advisory Referendum Act, which came into force in 2015. Many analysts regard the coming Dutch referendum as primarily an opportunity for anti-EU forces in the country to voice their opposition to the European Union in general, and to potential future EU enlargement in particular. Dutch critics of the EU-Ukraine Association Agreement have sought to portray it as a de facto stepping stone towards future Ukrainian membership of the European Union, despite the absence of any mention of a membership perspective in the agreement itself.

Dutch Prime Minister Mark Rutte has defended the Association Agreement as a step that opens up new markets for Netherlands businesses. “We are a trading nation. We live by free trade agreements and Ukraine is another example of this,” he commented in January. He has also been critical of the antiEU expansion sentiment being promoted by ‘no’ campaign, arguing that the Association Agreement ‘has nothing to do with accession’.

With the ‘no’ camp facing accusations of seeking to play on Dutch voter concerns over further EU expansion, the trade delegation visit to Kyiv and Netherlands-Ukraine Business Forum in March will provide important and timely opportunities to highlight the potential commercial advantages of the Association Agreement. Business Ukraine magazine spoke to Netherlands Ambassador to Ukraine Kees Klompenhouwer about these key coming events and asked him what role he sees the Netherlands playing in Ukraine’s efforts to reform its economy and integrate into European markets.

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About the interviewee: Kees Klompenhouwer is the Netherlands Ambassador to Ukraine What do you regard as the most attractive opportunities for Dutch businesses resulting from the free trade provisions of the

EU-Ukraine Association Agreement?

Greater economic cooperation between the EU and Ukraine will offer both sides new : www.bunews.com.ua

intereview

: benefits, including structural growth and

job creation. These benefits derive from the progressive removal of customs tariffs and quotas, which will open up new markets. However, the biggest benefit will be Ukraine’s adoption of EU economic legislation. This will align key sectors of the Ukrainian economy to EU standards, which will further open up our respective markets.

Ukraine wants to harmonise its procedures with those of the EU. But implementation is a challenge. This will create ample opportunities to expand Dutch exports, not only of agricultural and industrial goods, but also of expertise and knowledge.

In the past year, Ukraine has made significant progress in reforming its procurement processes. It has implemented an improved system that ensures greater transparency across the board. This will allow Dutch service providers to bid for contracts on an equal footing. These are the steps that the Ukrainian government has already taken to improve the country’s business climate.

Yet there is still much more to be done for Ukraine to harness its full potential. We’re not the only ones who want to see results.

The Ukrainian people do too. Further steps will stabilise the economy and sustain the recovery that has already begun.

If ratified, the Association Agreement will serve as a compass to guide Ukraine in implementing its reform process. All this will create opportunities for traditional Dutch exports like dairy, potatoes and a range of horticultural products.

Still, it’s important to remember that the Association Agreement hasn’t been ratified yet.

The Netherlands will hold a referendum on this issue on 6 April. The Dutch government continues to support the agreement and is backing a ‘yes’ vote.

What steps is the Dutch government taking to help Dutch and Ukrainian companies make the most of the opportunities offered by enhanced free trade?

The Dutch government is in favour of the effective implementation of Association Agreement and the trade benefits it brings.

That is why we want to see a ‘yes’ vote on 6 April. However, at the same time, it is up to the Ukrainian government to implement its own reform agenda.

The Dutch government can share knowledge and expertise to support Ukrainian companies in entrepreneurship and trade. We can

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provide Dutch companies with all the information they need to help them do business in Ukraine.

In the Netherlands, the Ministry of Foreign Affairs, together with export support agencies, can provide information on markets. In Ukraine, the Netherlands Embassy in Kyiv can help companies with questions that are specific to the Ukrainian market. We also organise seminars and events for businesses to help them find suitable contacts and establish strong networks. In recent months, we have hosted a Holland Pavilion at an agriculture show in Kyiv and organised a trade mission to Dnipropetrovsk. We have also explored opportunities in the logistics sector in Ukraine. In addition, we support the Ukrainian government with our commercial knowledge. We have developed a training programme for advisors from the Ukrainian Chamber of Commerce, so that they can become export experts. We have also discussed challenges and opportunities for the Ukrainian clothing sector in the EU market.

The trade mission to Ukraine, led by Dutch Minister for Foreign Trade and Development Cooperation Lilianne Ploumen, and the Business Forum scheduled to take place in the Netherlands in late March, will be key opportunities to help Dutch and Ukrainian firms do business in each other’s countries.

Where do you see the greatest opportunities for Ukrainian companies seeking to develop partnerships in the Netherlands?

There are many ways for Ukrainian companies to forge partnerships and explore business opportunities in the Netherlands. For instance, last year a Joint Business Council was set up by the Confederation of Netherlands Industry and Employers (VNONCW) and the Ukrainian Chamber of Commerce. This could serve as a starting point for Ukrainian businesses looking to form partnerships in the Netherlands. Ukraine is committed to dramatically reforming its economy and industry. There are many ways that Dutch companies could help the country’s transition towards a modern economy. This includes investing in agricultural companies with know-how, in highquality agricultural supplies or in equipment for agriculture and food processing. It could also include help with urban planning and the development of renewable energy resources. These are just a few examples. I would urge the Ukrainian private sector to

reach out to Dutch companies to see what they can learn from each other. This way, both sides can benefit from building sustainable and profitable businesses.

Many international investors have adopted a ‘wait and see’ approach towards postMaidan Ukraine in general and towards the country’s ambitious reform agenda in particular. Which aspects of the reform agenda are the top priorities for Dutch businesses as they assess the attractiveness of potentially entering the Ukrainian market?

Ukraine needs to keep improving its business climate. The Association Agreement provides the framework for the necessary changes.

Fighting corruption is an important part of this. The main priority is harmonising laws, norms and regulations with EU standards in trade-related sectors such as agri-food.

Based on your experience of trade ties between the Netherlands and other EU neighbours with emerging economies, which countries could offer useful models for Ukraine when it comes to developing EU trade?

Other Central and Eastern European countries have gone through similar processes of EU integration and I would encourage Ukraine to learn from their experiences. The Dutch government supports the idea of the Visegrad Group (the Czech Republic, Hungary, Poland and Slovakia) teaming up to share their experience with Georgia, Moldova and Ukraine. These countries went through the same process, albeit in different stages. So it makes sense for them to work together.

In your view, what kind of impact might the EU-Ukraine DCFTA have on the overall EU economy in the medium to long term?

Creating structural, innovative growth and jobs is one of the priorities of the Netherlands Presidency of the Council of the EU. We believe that this can be achieved through sustainable trade and balanced trade agreements with third countries. Increasing trade opportunities with Ukraine will help strengthen the EU economy as a whole.

Ukraine’s share in EU trade may not be so big now, but it is a market with over 40 million consumers. If Ukraine succeeds in reforming its economy, it has huge potential.

And in the long run, this will create a stable and wealthy country. www.bunews.com.ua

reform

Anti-corruption reforms create risks and opportunities Ukrainian companies focus on anti-corruption strategies in response to ongoing reform process The post-revolutionary reform process in Ukraine may be proceeding far more slowly than many would like, but reforms are nevertheless slowly but surely making an impact on the Ukrainian business environment. Evidence of this progress is still relatively thin on the ground, but it is out there. For example, Ukraine ranked 130th out of 168 countries in the 2015 Transparency International Corruption Perception Index – up 12 places from 142nd in 2014. This modest improvement is partially down to the fact that Ukrainian anticorruption legislation has recently undergone quantitative and qualitative changes. Meanwhile, the enforcement efforts of state authorities have also become noticeably more sophisticated in this area. In response to these developments, Ukrainian companies are paying more and more attention to monitoring anti-bribery and corruption (ABC) risks.

Ukrainian and international legislation

In recent years, the Ukrainian parliament has succeeded in significantly developing the country’s anti-corruption legal framework.

Although there have been positive changes in this area, Ukrainian lawmakers still have some way to go before become Ukrainian legislation is compliant with global best practice. As a result of the differences between Ukrainian and international anti-corruption regulations, companies operating in Ukraine must take relevant foreign anti-corruption legislation such as the UK’s Anti-Bribery Act into consideration.

Additionally, they must also be aware of the role played by the newly established Ukrainian anti-corruption authorities, which were set up in 2015 and began to operate towards the end of the year. In practical terms, this means that many Ukrainian businesses find themselves sandwiched between cross-border law enforcement and national agencies charged with curbing corruption.

Avoiding fines

In general, experience has shown that the Ukrainian subsidiaries of international corporations and business

corruption issues. However, this greater awareness does not necessarily translate into easier risk management. In recognition of the challenges presented by the shifting anti-corruption environment, many Ukrainian companies are now choosing to focus their attention on preempting rather than eliminating risks. For a significant percentage of Ukrainian businesses, this has meant a change in approach. ABC considerations are no longer regarded as little more than a particularly expensive form of compliance that must be undertaken by companies preparing to acquire or merge with other corporations in foreign jurisdictions such as Germany, the UK or the US.

Avoiding successor liabilities

groups tend to attach the highest level of importance to managing potential ABC risks. This is entirely logical, given the relatively higher financial and reputational risks that these subsidiaries face for potential compliance offenses. Reputational damage can and will cross international borders, leading to negative impact beyond the Ukrainian subsidiary. Fines imposed by Ukrainian legislation are also substantial by local standards. Individual company officials can be subject to fines of up to UAH 25,500 in cases involving the acceptance of unjustified benefits. Meanwhile, fines imposed on companies may be up to double the amount of illegal income involved in any given offense. If the amount of illegal income is impossible to determine, fines can range from UAH 85,000 to UAH 1,275,000.

Historically speaking, implementation has often differed significantly from theory in the world of Ukrainian business law, but this logic may not apply to the new generation of ABC regulations.

If we bear in mind the extent and nature of the reforms introduced in the anti-corruption field, it is reasonable to assume that the Ukrainian authorities will take a more holistic view of ABC compliance in future. This will force Ukrainian companies to respond by introducing comprehensive ABC procedures of their own.

Business community seeking to preempt ABC risk

Analysis of the current business climate suggests that businesses in Ukraine have already developed a better understanding of the risks created by the changing legislative field surrounding anti-

Investors looking to enter the Ukrainian market must also learn the same lesson. They must appreciate that ABC due diligence should be undertaken as a core aspect of overall due diligence prior to any Ukrainian acquisition. Such precautions will help investors to avoid falling foul of successor liabilities and prevent future bribe payments occurring.

Gaining a full understanding of these risks at the outset of any acquisition talks via comprehensive ABC due diligence will allow all parties to make the necessary adjustments to the purchase price.

Indemnities can also be obtained from vendors and disclosures made in advance to the relevant authorities. By identifying weaknesses in a company’s processes and operations, the acquirer can prepare an appropriate plan for remediation once the target company is bought, both in terms of ABC, and in terms of other compliance matters.

ABC due diligence as a value driver

The second key lesson for investors is that ABC due diligence should be seen as a driver of value.

As well as providing a better overall understanding of the acquisition target, ABC due diligence should also help to improve the performance of the company once it has been acquired. The alternatives may well leave the acquirer with considerable problems to deal with further on in the acquisition and integration process. Once you have acquired a company, you may find that differences in corporate culture, processes and systems can make it hard to integrate into a global group compliance structure.

About the author: Tetiana Kheruvimova is Senior Associate of the Tax and Legal Department at KPMG in Ukraine

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business

Open data initiative aims to boost startup culture New 1991 Open Data Incubator initiative offers Ukrainian startups mentoring and investor help February saw the opening of the 1991 Open Data Incubator initiative in Kyiv. Supported by the Western NIS Enterprise Fund and Miscrosoft Ukraine, the incubator is Ukraine’s first non-commercial development programme for IT startups based on open government data. Business Ukraine magazine spoke to incubator co-founder Denis Gursky about the goals of the initiative.

What is the concept behind the Open Data Incubator?

In today’s world, big data is no longer a mere trend – it is everywhere. Your car tracks your route, your phone tracks your calls, and your browser tracks your behavior online. This is also the case when it comes to open government data.

The government owns the data infrastructure that taxpayers pay for. The time has come to share it. Open government data grows very quickly as the amounts of data stored by the government are incredible. When you combine this amazing information with over 100,000 coders in Ukraine, you have the start of something big.

Ukraine desperately needs new applications and data services. We have a talented army of IT professionals so it is time to stop outsourcing and to concentrate instead on creating products for the internal market and for export.

This is how the idea for 1991 Open Data Incubator began. We wanted to make the results of hackathons more sustainable and keep people focused on their ideas rather than letting them slip back into study or everyday work. The process is simple: after a selection process that takes slightly more than a month, teams gain access to a six-week incubation programme including lectures, mentorship and customer development periods.

What are the key goals of the incubator?

The incubator aims to create local jobs and startups based on open data

and involving local teams that are engaged in addressing specific problems. As the incubator is non-commercial, it can serve as a model for similar initiatives in many other places including universities and city halls. One key message behind the incubator is cooperation between government, IT companies and civil society. It is a good case study where all participants have found something important for themselves. Depending on the specific concept of each project/startup, there are three possible exits from the incubator. If it is a commercial enterprise based on open data or PPP, then the goal is to find seed stage investors. New NGOs will seek to continue working with donors. Other initiatives can seek incorporation into the state or stateowned enterprises.

Who can participate in the incubator and how does the selection process work?

Anyone can apply. The process involves an online application reviewed by a committee of judges.

After passing this process, teams move on to the hackathon stage, where judges assess teamwork, delivery and motivation. There is then a pitch session at the end of the hackathon.

What are the key zones of focus for the incubator?

It often seems like Ukraine’s key industries (energy, agriculture, infrastructure and the public sector) were making money for all these years with no focus on optimization, better decision-making, or providing additional services. This approach is no longer suitable. Customers want more and

growing competition demands more. These sectors are the least digitalized in Ukraine and are the most profitable. We expect them to develop. They should expect to feel the impact of the data revolution currently taking place in the EU. According to research by the Economic Institute of Warsaw, the EU economy will benefit by as much as 2% of GDP by 2020 because of the extensive use of data in these key sectors.

Who are the partners of the incubator providing training and potential funding?

1991 Open Data Incubator is backed by SocialBoost, a tech NGO that pioneered the open data movement in Ukraine 4 years ago with the launch of the data.gov.ua service in Ukraine. The incubator partners with the Cabinet of Ministers of Ukraine as this provides direct access to ministries. The incubator has strong cooperation ties with other donors and a variety of IT-focused NGOs including BrainBasket. We also partner with members of the investment community such as UA Angel.

What is the desired impact of the incubator on the Ukrainian business environment?

The incubator’s mission is to spark the further development of startup culture by providing a model for university incubators and city hall incubators.

Many mayors now support the idea and the first city pilots will be launch as early as April 2016. We have also started getting calls from neighbouring countries and we are happy to share the experience that we have.

About the interviewee: Denis Gursky is co-founder of the 1991 Open Data Incubator

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it industry

From warzone to IT classroom Swedish IT company offers professional training to Ukrainian refugees fleeing Russian hybrid war The city of Poltava has a special place in SwedishUkrainian relations, being the site where Swedish forces were defeated by Russian Tsar Peter the Great in the famous early eighteenth century Battle of Poltava. More than 300 years after the battle, Poltava is a rather ordinary Ukrainian city of 300,000 people which has little interaction with the global economy. However, a modern conflict in regions neighboring Poltava is bringing Swedes back to the area, this time as saviors rather than would-be conquerors.

Poltava has in recent months taken in thousands of of Internally Displaced People (IDPs) from the east of Ukraine, fleeing fighting between Russianbacked militants and Ukrainian forces. Ukraine officially has 1.4 million IDPs (approximately 3% of the total population) but difficulties registering with the authorities mean the real figure is likely to be much higher.

These refugees have arrived in all corners of Ukraine, bringing both personal needs and the normal human desire to work and build new lives. With Ukraine undergoing a severe economic crisis (the economy of what was already one of Eastern Europe’s poorest countries shrank by approximately 11.5% last year according to European Bank for Reconstruction and Development estimates) good jobs for new arrivals are hard to come by.

The challenge to help IDPs find work has been taken on by Swedish entrepreneurs Andreas Flodstrom and Gustav Henman. They first came to Ukraine in 2012 with, in their own words, “only business cards and a Lada”. They initially lived on air mattresses in the capital city Kyiv for five months while setting up an IT outsourcing company called Beetroot, the main ingredient of Ukraine’s famous borsch soup.

Ukraine: land of IT opportunity

Tech is big business in Ukraine, with the country’s universities turning out 16,000 IT professionals each year and a total stock of 90,000 certified IT professionals according to

the Ukrainian Ministry of Economy. Outsourcing companies make good profits linking Ukrainian programmers with international companies needing IT expertise. Beetroot was enjoying growth, with 15 regular clients on the books, approximately half from Sweden initially picked up through leveraging personal networks back home. But Ukraine’s 2013-14 Euromaidan Revolution switched the young Swedes’ priorities.

The revolution and subsequent Russian annexation of Crimea and hybrid invasion of eastern Ukraine did not have to mean change for Beetroot and its 60 employees. Many IT companies carefully tailor their business processes to the point that international clients may not even know they are dealing with programmers based in Ukraine. However, Andreas and Gustav decided that they could not turn a blind eye to the changes happening in their adopted country and set to work figuring out how they could help Ukrainians affected by the war to find new work.

The initial challenge was that IT outsourcing in Ukraine is centered on large cities with approximately one million citizens or more. Having taken a Masters in Engineering in Moscow with no prior knowledge of the Russian language, the two young Swedes are not shy of a challenge and chose Poltava as the city best positioned to help refugees despite having very few internationallyfocused IT companies. Initial help for the project came from the Swedish International Development Corporation with a planning grant, which the two entrepreneurs spent not on planning but on running an initial four-month course for 12 young Ukrainians.

In 15 months, three sets of 12 students have taken the four-month course at the Beetroot Academy, with only one person dropping out. A sizable 40% of students registered are female, which is quite an impressive statistic for the rela-

About the author: Conal Campbell is an Irish writer living in Kyiv

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tively male-dominated world of IT. Free English classes are also included. The Beetroot Academy specializes in front-end development, relatively simple programming in high global demand. The program recently attracted a new round of funding from a United Nations Development Program (UNDP) tender financed by the government of Japan. Thirty students are currently enrolled after 420 applications were received for the most recent intake. The academy has also expanded to the Ukraine’s main Black Sea port Odesa.

Helping IDPs help themselves

The Academy’s positive effect in its graduates’ lives thus far have been quite impressive. A four-month course is obviously not the same as a four-year degree but nevertheless 70% of the Academy’s graduates have gone on to find work in the IT sphere. Half of graduates are employed directly by Andreas and Gustav, while others have gone on to work for some of their competitors. Crucially, all 36 students of the first three academy courses have stayed in the city of Poltava, bringing skills and innovation to the jaded local economy. Salaries for front end developers, even with limited experience, are more than three times the average salary in Poltava, a solid living considering the average wage in the local economy is currently as low as USD 100 per month. One student of the academy, Oleksandr, before beginning his IT career had been driving a taxi in Poltava, work which makes literally only a few dollars of profit each day.

The two Swedes hope to roll out similar academies throughout the post-Soviet world, where mathematical literacy is high but connectedness to modern business trends lacks. Their ambition is to teach ‘thousands’ of students each year and in Andreas’s words: “save the world one line of code at a time”.

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Startup Superstar

startup nation

Ukraine’s First Forbes International recognition for Ivan Pasichnyk can inspire Ukraine’s emerging IT startup generation 28 year old Kyiv native Ivan Pasichnyk was the toast of country’s IT and startup communities in January when he became the first Ukrainian to be featured in Forbes magazine’s prestigious annual ‘30 Under 30’ international ranking. Pasichnyk was including in the 2016 list for the work of his company, Ecoisme, which develops hardware and software allowing homeowners and utility companies to monitor and control energy usage via their smartphones. He insists the accolade is merely the result of hard work, and says he hopes the international recognition he has received will now inspire other Ukrainian IT entrepreneurs to think big.

Poster boy for the Ukrainian startup scene

Pasichnyk is every inch the startup poster boy, complete with grungy garb and untamed goatee beard. When he sat down to chat with Business Ukraine magazine in mid-February, he was sporting a Kyiv Mohyla Academy hoodie despite being a graduate of the considerably less hipster-friendly Kyiv Polytechnic Institute. It was a choice that seemed to speak volumes about the growing confidence of Ukraine’s startup scene, hinting at a new generation seeking their cultural reference points closer to home. In conversation, Pasichnyk comes across as a focused but understated executive who is far more comfortable talking about his product than himself. He seems mildly embarrassed by the media hype surrounding his newfound Forbes fame and complains that the Ukrainian press have made too much out of it. “The media have tried to portray us as superheroes but the reality is much simpler,” he says. “I’m not a genius or a superhero. I’m just someone doing what I love.”

Despite this apparent reluctance to bask in the limelight, Pasichnyk concedes that the media coverage surrounding his Forbes breakthrough will serve a useful purpose if it encourages other innovative young Ukrainians to take the startup plunge. “It is good that people now realize it is possible. Other Ukrainians need to believe they could also be featured in Forbes magazine,” he offers.

Ukrainians must overcome fear of failure

In order for Ukraine’s fast-expanding knowledge economy to reach its true potential, Pasichnyk believes Ukrainians need to rethink the way they approach startup businesses. According to some estimates, Ukraine now has the highest number of IT professionals in Europe, but the booming Ukrainian IT sector remains dominated by companies engaged in outsourcing work.

Pasichnyk says he would like to see much more Ukrainian entrepreneurial innovation. “Ukrainian IT programmers have a great reputation internationally, but they are paid by the hour. Developing our own products opens the door to far greater revenues,” he states.

Part of the problem as Pasichnyk sees it is a business culture where failure is generally regarded as both shameful and definitive. “In America, failure is seen as part of the ordinary business cycle, whereas in Ukraine it is the end of the world,” he reflects. “We need to stop being afraid of failure and start trying to do different things without worrying about what’ll happen if it is February 2016

not a success.”

He is also critical of the country’s higher education system. Ukraine’s universities have been largely responsible for producing the graduate talent behind the current explosive growth in the IT sector, but Pasichnyk sees considerable room for improvement. He points to the ridiculously low salaries many professors and academics receive and claims that there are far too many ‘fanatics’ among teaching staff, before complaining about faculties full of ‘old people who don’t really understand how the modern world works’. These critiques are nothing new and reflect widely held beliefs throughout the IT and startup sectors about the need for systematic reform within Ukrainian higher education. Although he himself is a graduate of the Ukrainian university system, Pasichnyk says it might actually be better for young Ukrainians to start working in the IT sector as early possible, foregoing a traditional university degree course and using online courses instead as an avenue to greater professional skills.

Creative and comfortable in Kyiv

The spirit of innovation is something that tends to come naturally, and it is no surprise to learn that creativity has long played a key role of Pasichnyk’s everyday life. Prior to his breakout success with Ecoisme, he says he made everything from furniture to sniper rifles. However, Pasichnyk’s number one passion has always been IT. The Ecoisme idea grew from an energy project first put together during a Kyiv hackathon. The censors that his company produces for home installation utilize Ukrainian IT knowhow and Ukrainian programming skills. Pasichnyk has designed his product for customers in Europe and North America who combine higher demand for energy efficiency with increased consumer expectations of convenience.

Despite looking west for both markets and investment, he says he has no intention of relocating the company or leaving Kyiv permanently. The Ukrainian IT industry continues to suffer from a serious brain drain problem, but Pasichnyk says he does not plan on joining the exodus just yet. “I will personally be wherever I need to be in order to make the business work, but as a company we intend to remain based in Ukraine. We are all comfortable living here. Besides, we have an excellent network of contacts and have access to a range of great and inexpensive specialists.”

The immediate priority for Pasichnyk and his Ecoisme colleagues is attracting more investment. The group can already count on major strategic investors such as Deutsche Telekom. They claim to currently be in talks with at least 70 more potential investors. Startup investment in Ukraine is a potentially lucrative but highly speculative business, something Pasichnyk acknowledges when he likens the current investor environment to the Wild West. Nevertheless, he says he is confident that those who buy into his company at this relatively early stage will come to see themselves as the lucky ones. “I’d advise anyone to consider investing in us now. Because soon we will be much more expensive,” he concludes.

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Debunking Putin’s Crimean Conquest

Crimean invasion anniversary: many myths that accompanied Russian takeover continue to linger

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www.bunews.com.ua

February 2016

the hysteria among Russian-speaking audiences, while blanket Kremlin denials gave correspondents and the diplomats pause for thought. These disinformation tactics benefitted from the widespread belief among international audiences that the truth always lies somewhere in-between the opposing sides of any story. It enjoyed an additional boost thanks to post-Iraq skepticism towards the mainstream Western media. The result was a stunningly successful information offensive that highlighted the potential security threat posed by the Kremlin media machine.

Even today, two years after the Russian takeover, many of the myths underpinning the Kremlin’s Crimean invasion continue to enjoy considerable levels of international acceptance. This represents a major ongoing security threat. Understanding the nature of the Russian information offensive in Crimea is crucial if the international community is to defend itself against similar future attacks. The Kremlin has already redeployed the disinformation tactics honed against Ukraine in both Syria and Ger: many. Further attacks are surely only a matter of time.

geopolitics

The 2014 Russian takeover of Crimea was one of those rare moments in world history when the entire international community was taken completely by surprise. With the benefit of hindsight, most analysts now regard the Kremlin’s Crimean gambit as the biggest geopolitical watershed since the fall of the Berlin Wall – a game-changing event which marked the end of the post-WWII European security system and the dawn of a dangerous new age.

However, when the Russian invasion first unfolded in February and March 2014, international politicians and journalists alike seemed unsure of exactly how to respond. This confusion was the direct and intended result of the Kremlin’s hybrid war tactics, which brilliantly achieved their goal of muddying the waters and casting a shadow of ambiguity over the entire Russian operation.

Information attacks played a key role in Moscow’s hybrid Crimean offensive, creating a virtual reality environment where the Kremlin’s positions appeared both rational and justified. Fake news reports helped whip up

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: As the world reflects on the second anniversary of this landmark Russian operation, Business Ukraine magazine examines five of the key narratives used by the Kremlin to justify the audacious and unprecedented annexation of Crimea.

Myth 1: No Russian Troops Involved

The takeover of Crimea began with the seizure of the Crimean Parliament building in Simferopol by squads of heavily armed masked men in military fatigues. Similar groups soon began appearing at government buildings, airports and other key infrastructure points throughout Crimea as it became clear that a major military operation was underway. These mysterious men wore no insignia and denied being Russian troops, despite operating in an obviously military manner and, in many cases, possessing the latest in Russian Special Forces equipment. The Kremlin backed up these denials, claiming the troops were merely volunteer defense forces drawn from the local community. To Ukrainian audiences and observers on the ground in Crimea, such claims seemed patently absurd. Nevertheless, the international media repeated these Russian denials verbatim, establishing a pattern of ‘he said, she said’ reporting on the Ukraine crisis that was to have disastrous consequences for the country.

The so-called ‘little green men’ became symbols of Putin’s new form of hybrid warfare, providing the Kremlin with both a strong physical presence on the ground and plausible deniability of direct involvement. By lying about the role of the Russian military in the takeover, Moscow was able to depict events in Crimea as an act of self-determination on the part of the local population. Few where genuinely fooled, but the absence of clarity served to neuter the initial international response.

In the aftermath of Crimea’s annexation, Vladimir Putin soon felt safe enough to dispense with this charade. In spring 2014, he admitted Russian troops had played a secondary role in the takeover. By the time of the first anniversary in 2015, he was bragging of his role in the military takeover of the peninsula and claiming to have personally given the order to begin the operation on the same night President Yanukovych fled Ukraine. This was completely at odds with the Kremlin narrative put forward at the time of the takeover, but by then it was already too late.

Myth 2: Crimea is Historically Russian

The most potent argument in favour of the Kremlin’s Crimean takeover has probably been the idea that the Black Sea peninsula is historically part of Russia. This argument has proved surprisingly popular internationally, where it has been accepted at face value by a range of politicians, analysts and media correspondents. While they may disapprove of Russia’s heavyhanded approach and criticize the Kremlin’s disregard for international law, apologists like to point out that the separation of Crimea from Russia was unnatural and unsustainable. In this sense, the myth of Crimea’s Russian roots has undoubtedly helped make the annexation appear more palatable to outside audiences. It has conveniently ignored Crimea’s long and complex past, while providing an act of naked military aggression with a veneer of historical justice.

In reality, Russian colonization of Crimea is a relatively modern phenomenon dating back to the end of the eighteenth century. Prior to the arrival of Russian imperial troops, Crimea had spent far longer periods under Ottoman, Crimean Tatar and Byzantine rule. Since the 1950s, it has been part of Ukraine. The Russian role in Crimean history is certainly significant, but Moscow has no exclusive claims to a region that has always been one of the great cultural crossroads of Eastern Europe.

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Myth 3: Ukrainian ‘Fascists’ Posed Direct Threat to Crimea Ever since WWII, Kremlin propagandists have been prone to seeing fascists everywhere. The Soviets liked to label any national resistance groups within the USSR as fascists, and even referred to the Berlin Wall as the ‘Anti-Fascist Protective Barrier’. This tradition has continued in today’s Russian Federation. Over the past decade, the modern-day Kremlin has enthusiastically identified fascist threats everywhere from Lithuania and Estonia to Syria and Georgia.

In practical terms, anyone from the old Soviet empire who seeks to break away from the Russian orbit can expect to receive the fascist label. This fascist fixation is rooted in the deep trauma created by the deaths of over 20 million Soviet citizens in the war with Nazi Germany. The Red Army victory in WWII became the holy of holies for the Soviet Union, taking on quasi-religious qualities and serving to justify all the horrors of the Stalin era. This approach has been coopted by the Putin regime, which has actively sought to portray the WWII triumph as the definitive Russian achievement. Part of this process has been to position all modern-day opponents of Russia as the ideological heirs to the Nazis.

Russia’s response to Ukraine’s Euromaidan protests reflected this approach.

Despite the participation of millions of ordinary Ukrainians in the nationwide anti-government protests, the Kremlin chose to highlight and exaggerate the role of marginal nationalist and far-right groups. Whereas most observers saw a popular uprising against a corrupt regime, the Russian media identified yet another fascist plot. This set the tone for the information attacks that followed the fall of the Yanukovych government. Russian media and Kremlin spokespersons claimed a ‘fascist coup’ had taken place in Ukraine and used this alleged fascist threat to justify Russian intervention in Crimea.

The ‘fascist threat’ narrative played a key role in the takeover of Crimea. Fake news reports appeared on Kremlin TV claiming to show Ukrainian fascist violence in Crimea but in reality featuring footage from earlier Kyiv clashes.

Crimeans where informed that legions of Ukrainian fascists were on their way to Crimea to carry out ethnic cleansing. Hysteria reached such a degree that few noticed the absence of any actual fascists.

In reality, the key opposition to Russia’s Crimean takeover came from the Crimeans themselves – from Crimean Tatars, ethnic Ukrainians and Russians who saw their future as part of a democratic, European country. There was no evidence of any attempt to ‘Ukrainianize’ Crimea, but this did not stop Russia from using the phantom fascist threat as a smokescreen for the annexation of Crimea.

Myth 4: Crimean Referendum Adhered to International Standards

The referendum vote of March 2014 is the defining event of the Russian takeover. According to the official Kremlin narrative, it was a free and fair vote that demonstrated the overwhelming desire of the Crimean people to return to Russian rule. Russian accounts of the referendum claim a voter turnout of over 80%, with 96% voting in favour of the Russian annexation. While many outside observers have questioned the credibility of these figures, there has also been widespread acceptance that a broad majority of Crimeans did indeed vote for Russian reunion. Such attitudes have been particularly prevalent in the international media, with reports routinely positioning the Crimean referendum as an unorthodox but overwhelming demonstration of public support for reunion with Russia. This tacit acceptance of the Kremlin’s Crimean referendum risks encouraging further breaches of international law and ignores the ample evidence refuting Russian claims of a free and fair ballot.

In reality, the Russian referendum suffered from a range of fundamental flaws that fatally undermined its credibility. Despite Russian treaty obligations to respect Ukraine’s territorial integrity, the referendum was a clear and direct www.bunews.com.ua

breach of the Ukrainian constitution, which states that votes on succession must be nationwide and cannot be limited to a single region.

Internationally recognized election observation groups such as the OSCE did not monitor the referendum, while OSCE observers where repeatedly barred from entering the peninsula. Instead, the Kremlin invited an odd assortment of far-right and far-left European parliamentarians to Crimea to create a fig leaf of international respectability for the vote.

The vote was rushed with no credible campaigning period. Russia twice brought the date of the referendum forward, presumably because they feared an unraveling of the invasion if they allowed events to unfold at a more leisurely pace. The options in the referendum were also flawed. Voters did not have the choice of maintaining the status quo as an autonomous part of Ukraine – they could choose between the de facto independence of the 1992 constitution or Russian annexation.

Most importantly, the referendum took place with Russian occupation troops and pro-Kremlin paramilitaries stationed throughout the peninsula. Any vote taking place under the barrel of a gun is invalid by any international standards.

The Crimean referendum was a classic example of such a shotgun vote.

The global diplomatic community has acknowledged the invalidity of the referendum, with a post-referendum UN vote producing overwhelming support for Ukraine’s territorial integrity. Only a handful of countries have recognized the ballot as valid.

These criticisms do not mean that a pro-Russian vote in Crimea was implausible. On the contrary, most independent observers, both before and after the annexation, have drawn the conclusion that a majority of Crimeans leaned towards Russian reunion. Nevertheless, the referendum was a flagrant violation of international law that has made it impossible for the international community to accept the official outcome of the vote.

Myth 5: NATO Planned Crimean Naval Bases

In the wake of the Russian takeover of Crimea, a flurry of stories appeared February 2016

geopolitics

Crimean women rally in support of Ukraine in the Crimean city of Yevpatoriya on 8 March, 2014. Many Crimeans opposed the Kremlin takeover but the international media has broadly accepted the Kremlin narrative of overwhelming local support for the Russian invasion

claiming that the Kremlin had thwarted American plans to establish NATO naval bases in Crimea. This was part of the broader Russian narrative depicting Kremlin actions in the former Soviet Union as defensive moves in response to aggressive Western policies of containment and encirclement.

There is no actual evidence of US plans to deploy warships to Crimea.

Nor is there any obvious strategic sense in them doing so. NATO member states Turkey, Romania and Bulgaria all offer the alliance the option of establishing Black Sea port bases. Crimea provides a potential platform to launch attacks against Russia itself, but NATO member Baltic States already offer similar launch pads for any such theoretical anti-Russian offensives.

The only plausible reason to develop NATO bases in Crimea would be in order to deprive Russia of military access to the peninsula. However, before this could happen, Ukraine would have had to go through a long are challenging NATO membership process that would last for years if not decades.

In other words, NATO had little practical reason to seek Crimean naval bases, while any moves in that direction would have necessarily been gradual and long-term undertakings.

The Russian narrative of NATO encirclement is a central pillar of the Putin regime’s security doctrine and one of the Kremlin’s trump cards in the information war. It presupposes an expansionist and aggressive NATO alliance. In reality, NATO growth since the end of the Cold War has come entirely at the initiative of Central and Eastern European countries. These candidate nations have been motivated to seek NATO membership by concerns over possible future Russian military aggression. In other words, socalled Russian ‘encirclement’ is largely due to fear of Russia. As if to prove this point, NATO membership had never enjoyed significant popular support in Ukraine until Russia’s 2014 hybrid war attack. As a direct result of Russian actions in Crimea and eastern Ukraine, a majority of Ukrainians now favour NATO membership for the first time in the country’s independent history.

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Davos 2016: Five takeaways on Ukraine Andy Hunder, President of the American Chamber of Commerce in Ukraine

good sign for investors.

2) Corruption remains the biggest threat There was no avoiding this issue – almost every person talking on Ukraine brought up the issue of corruption as the poison killing the country. The general feeling was that not enough has been done to demonstrate that Ukraine’s leadership is taking this issue seriously enough. Much more must be done in the first half of 2016 with corrupt high ranking officials going to jail. The clock is ticking and tangible results must be demonstrated on eradicating corruption.

23-year-old Ukrainian Liliya Borovets was officially registered as the youngest participant attending the World Economic Forum in Davos this year. Of the 2500 business, political, and academic leaders, including 40 heads of state, 300 ministers and 500 journalists making their annual pilgrimage to the exclusive Swiss ski resort, Liliya, who is studying at MSc Innovation, Entrepreneurship at Lviv Business School Ukrainian Catholic University, was at Davos as one of 50 young elite Global Shapers Community recognised as being “exceptional in their potential, their achievements and their drive to make a contribution to their communities.” The average age for participants in Davos is 55 for men and 49 for women. I was inspired by Liliya when I briefly met her purely by chance in Davos. People like Liliya represent the new, post-Maidan Ukraine, which is going through massive change. How has Ukraine changed? This was very much the question asked by many whom I spoke with at the highest town in Europe at an altitude of 1,560 meters. The mood in Davos on Ukraine was generally upbeat and cautiously optimistic on the outlook for 2016, looking at the positives achieved over the past 12 months in stabilizing the macroeconomic system and starting implementation of reforms.

Here are my five takeaways from Davos 2016: 1) Ukraine’s Economy has hit rock-bottom, signs of growth forecast in 2016 With Ukraine’s GDP down 10% in 2015 and a fall of 6.7% in 2014, we are looking at growth, albeit only a 1.5% increase in 2016, which is a

2016 Chamber Official Service Providers:

February 2016

3) Clash of the old and new, no turning back Finance Minister Natalie Jaresko was Ukraine’s star ambassador at Davos this year, recognised for her work on restructuring the sovereign debt and bringing macroeconomic stability. The resistance that the ‘new’ ministers face is distressing given that the old guard do not want to change and want to go back to old corrupt cronyism and non-transparent measures. Jaresko received “A grade” recognition across the board from key international figures. It was only two years ago when Prime Minister Mykola Azarov having arrived to Davos was uninvited to speak at the event. The credibility towards individuals in Ukraine’s government has changed dramatically.

4) A highly impressive new generation of upcoming young leaders A group of around two dozen Ukrainian Members of parliament, and media representatives, all mostly in their mid-thirties, were invited to the Ukrainian breakfast organised in Davos by the Victor Pinchuk Foundation.

An extraordinary bunch of multilingual individuals, the majority active participants of the Maidan, demonstrate where the new leadership will arise from. I had the opportunity to speak with many in this group and was reinvigorated to hear their strategic vision and long term plans.

5) Investors are watching closely Large scale investors are keeping an eye on Ukraine. Understanding that a ceasefire is likely to hold in 2016 and that Ukraine is a significant market in Europe, investors are observing, with an understanding that now could be a good opening to enter the market. Richard Branson confirmed that he did look into Virgin entering Ukraine’s mobile communications market but was beaten to it last year by British competitor Vodafone. Numerous other investors are looking, in various sectors. A transparent privatisation of Ukrainian state owned enterprises could bring in billions of dollars of new investment over the next couple of years.

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EU still in denial over Russian infowar threat Minister of Information Policy Yuriy Stets says EU unprepared for Kremlin hybrid war tactics In late January 2016, a watershed event took place in Germany. Thousands of Russian-speaking German residents took to the streets to protest over the alleged sexual assault of a Russian-speaking teenager in Berlin at the hands of an ‘Arabic-looking’ gang. The protests where fuelled by lurid coverage of the allegations on Kremlin-controlled Russian language news channels. A host of Russian politicians – including Foreign Minister Sergei Lavrov – added to the scandal by accusing the German authorities of a cover-up. Inflammatory and emotive social media posts helped amplify the mood of anger among Germany’s multi-million strong Russian-speaking population. There was only one problem – the alleged sexual assault never took place. Germany had just experienced its first major Russian information attack. Putin’s hybrid war had arrived in the heart of the EU, and it appeared to be targeting the immigration policies of Germany’s Chancellor Merkel herself.

When Business Ukraine magazine sat down for an interview with Ukrainian Minister of Information Policy Yuriy Stets in early February, the implications of this information attack where still being gradually digested by many in Germany and beyond. For Minister Stets, there was nothing particularly surprising about this expansion of the Russian information war. On the contrary, he seemed to regard it as vindication of his many warnings to Ukraine’s EU partners about the growing danger they faced.

“I have tried to explain on many occasions that this is not just a hybrid war between Russia and Ukraine,” he says. “This is a direct confrontation between the value systems promoted by Russia and the world’s developed democracies. We in Ukraine understand the risks posed by Russian infowar tactics and are able to estimate the dangers. Unfortunately, our European partners have yet to fully appreciate the scale of the danger. They continue to underestimate the threat posed by Russian propaganda. Tactics that worked in Ukraine will inevitably be deployed against the EU. This process has already begun – the recent example of the Russian-speaking girl in Berlin is just the beginning. The question is whether the European Union and the European Commission are prepared to take the necessary precautions. I am convinced they are not.”

Despite his bleak appraisal of Europe’s apparent lack of readiness to resist Russian information attacks, Ukraine’s Minister of Information Policy has some sympathy for his European colleagues. “Just over two years ago, nobody in Ukraine could have imagined we would be at war with our neighbour. Anyone who had said so at the time would have been regarded as insane,” he offers.

Nevertheless, his message to Ukraine’s EU partners is one of considerable urgency. “People have been in denial over information aggression for a long time.

This is not the case for everyone in the EU – the Baltic States and Poland appear to be well aware of the dangers – but countries located further away from Russia continue to believe that the threat does not apply to them. I would like to remind these countries about the lessons of World War II, when many people also believed that Hitler’s initial acts of aggression did not concern them. They were mistaken.”

Unsurprisingly, he argues that the European fight back needs to begin with greater support for Ukraine. “Do they really believe this is an exclusively Ukrainian conflict? They are wrong – we are merely on the front lines. This is a war of values. Europe needs to help itself by helping us.”

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Orwellian accusations prove misplaced Discussing Europe’s information security concerns seems to come as a welcome change for Stets, who has spent much of the past year defending his own ministry’s very existence. The former TV executive was appointed to head the newly created Ministry of Information Policy in December 2014 and immediately found himself at the centre of a firestorm of accusations. Critics of the ministry likened it to the Ministry of Truth in George Orwell’s dystopian novel ‘1984’. Images of Stets as an Orwellian ‘Big Brother’ soon began circulating on social media and appearing on placards at rallies opposed to the creation of the ministry. This initial opposition was understandable. At the time, it was widely assumed that the ministry would seek to exert control over Ukrainian media output and serve as a state censor. In a country recovering from the trauma of a pro-democracy revolution and still engaged in an existential struggle with an authoritarian neighbour, the mere suggestion of a return to state censorship was enough to generate howls of protest.

One year later, these early concerns appear to have been misplaced. The Ministry of Information Policy has not engaged in censorship or faced any accusations of muzzling the Ukrainian media, despite all the hype that accompanied its creation. Stets believes the critics have been proved emphatically wrong and argues that his ministry has an essential role to play in the country’s future security. “People who read Orwell should also read Churchill,” he quips. “Those who opposed the creation of the ministry need to study the information strategies of countries like Israel and America. They need to learn about the activities of the British government under Churchill during WWII, when similar information bodies were established.”

State censorship and revolution

As a former senior executive at Ukraine’s pioneering ‘5 Kanal’ TV news channel (owned by current Ukrainian President Petro Poroshenko), Stets was at the forefront of efforts to develop independent TV news coverage in the country.

He was one of the leading lights when 5 Kanal first emerged as a bastion of nonstate broadcasting during the run-up to the 2004 Orange Revolution, and as such has impressive credentials as an advocate of media freedoms. He speaks with undisguised passion about the importance of free speech, but also rules out any return to state censorship on purely practical grounds. “You’d have to be crazy to try to introduce censorship in a country that has experienced an uprising like Ukraine’s Euromaidan Revolution. First of all, attitudes in society towards state censorship have undergone a complete transformation. Secondly, any attempts to censor the Ukrainian press would be all over social media in a matter of minutes.”

While it is clear that the Ministry of Information Policy has not become a platform for state censorship, it is perhaps less clear exactly what the role and functions of the ministry are. When he took on the role of Minister of Information Policy, Stets identified four key objectives: reform of Ukraine’s international broadcasting, development of a national information security strategy, expansion of Ukrainian media broadcasting in the east Ukraine conflict zone, and reform of the Ukrainian government’s communications policy. He felt that sufficient progress had been made on all four fronts to tender his resignation : www.bunews.com.ua

interview

February 2016

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: in December 2015, but has since agreed to remain in office and continue his

work. Stets claims that much of this progress has taken place behind the scenes and has yet to reach the implementation stage, leading to a lack of awareness among the public about the ministry’s activities. He says he now plans to continue pushing this agenda in 2016, with the added priority of working to protect the rights of journalists in Occupied Crimea.

The Ministry of Information Policy is desperately short of resources, even by the modest standards of the cash-strapped Ukrainian government. Stets proudly states that the ministry has no drivers on its staff – a significant claim given the traditional Ukrainian enthusiasm for ministerial cars and chauffeurs. This lack of resources has placed limitations on the ministry’s objectives and forces Stets and his colleagues to forge international alliances. Some of the ministry’s biggest successes, such as the expansion of Ukrainian TV and radio broadcasting in east Ukraine, have only proved possible thanks to the support of foreign partners. Other well-received ministerial initiatives have included the programme to embed international journalists with the Ukrainian military.

Information security in the age of hybrid warfare

Despite the material limitations facing his ministry, Stets has little time for those who question the necessity of its existence. The forty-year-old Ukrainian media veteran is a long-time advocate of the need for greater national information security. He regards the creation of the Ministry of Information Policy as a long overdue measure and an essential component of national security policy in the age of hybrid warfare. “When people living in peaceful countries criticize the creation of the Ministry of Information Policy, it does not surprise me. When Ukrainians who have never been to the conflict zone are critical, this also comes as no surprise, but I have a different perspective.

I have been to the front lines in east Ukraine. I have seen the dismembered bodies. I do not want this carnage to continue. If somebody chooses to argue that the state does need an information security strategy, I would advise them to first visit the conflict zone and then tell me that Russian propaganda does not pose any danger. Let them take responsibility for the situation in the country and the losses we have suffered.”

There is a certain exasperation evident in much of what Stets says. This may be due to the fact his crusade for greater information security fell on deaf ears for so many years. He sees information attacks and economic attacks as the two key component parts of the hybrid warfare doctrine deployed by Russia against Ukraine, and claims to have been raising the alarm for much of the past decade. “Wars are no longer fought as direct military offensives,” he says. “The military component comes last, after the economic and information attacks have prepared the ground. Ukraine lost the economic war and then we lost the information war. Only then did the military stage of the conflict begin.”

Stets regards Russia’s current information offensive as part of a much longer-term campaign that began in the early 1990s and involved a range of le-

vers in addition to the media. He points to the creation of entire intellectual Potemkin villages in post-Soviet Ukraine, with think tanks established by Russia specifically to promote notions such as Ukraine’s inability to function effectively without close ties to Russia. According to Stets, Ukrainian society was constantly being encouraged to see European integration as impractical, while the shared past with Russia was emphasized. “This did not all happen overnight,” he stresses. “We’ve been losing the information war for the last 25 years.”

Free speech vs security concerns

The key challenge facing today’s Ukraine in the information sphere is finding the right balance between security and freedom. Ukraine’s post-Soviet progress has been marked by the emergence of one of the most pluralistic and diverse media landscapes in the region. Oligarchic ownership and editorial interference remain major concerns, but Ukraine has none of the direct state control that characterizes the media industries of most former Soviet republics. The Orange Revolution and the Euromaidan Revolution both helped to consolidate these free speech gains, resulting in a generation of young Ukrainians who regard direct state censorship as being largely a thing of the past.

This success is now under threat as the country seeks to defend itself against Russian information attack. With many Russian media outlets currently banned from Ukraine, the Kremlin is seeking alternative avenues in order to gain access to Ukrainian audiences. In this paranoid environment, it has become commonplace for any critics of the Ukrainian government to face accusations of working for Moscow. Political opponents will often exchange accusations of collaboration, leading to a climate of mutual suspicion and the erosion of public confidence in the media.

Stets says he is acutely aware of the challenges this creates. “There is a fine line between information security and infringements on freedom of speech,” he comments. “Our job is to find the right balance. If we ignore freedom of speech, we will lose our direction as a nation. If we ignore information security, we could lose our nation.”

“Unfortunately, our European partners have yet to fully appreciate the scale of the danger.

They continue to underestimate the threat posed by Russian propaganda.”

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www.bunews.com.ua

Western media must confront Kremlin fakes American journalist Julia Davis says mainstream media can do more to expose Russian disinformation The conflict in Ukraine has taught the world that modern wars are increasingly wars of the mind. Russia’s weaponization of information has proved devastatingly effective, demonstrating the prominence of information strategy in twenty-first century conflict. Indeed, many observers regard the Russian information offensive as the single most important and effective element of the Kremlin’s hybrid war against Ukraine.

Russia’s infowar tactics enjoyed considerable initial success but have since become vulnerable to the law of diminishing returns, as international audiences grow increasingly skeptical of Kremlin claims and learn to regard any information coming from Russian sources with suspicion.

Bands of online debunkers have encouraged this process by constantly exposing Russian disinformation and fakery.

One of the first personalities to draw international attention to Russia’s infowar deceits was Kyiv-born American investigative journalist Julia Davis, who began producing the ‘Russia’s Top Lies About Ukraine’ series in the wake of the Euromaidan Revolution. She told Business Ukraine magazine how she became involved in resistance to the Russian information war, and explained why she thinks the Western mainstream media should be doing much more to expose Kremlin disinformation.

You were among the first people in the English-language media to begin exposing Russian fakes about Ukraine. At what point did you decide to begin publicly countering the disinformation efforts of the Kremlin?

I was greatly impressed and inspired by the events of Euromaidan in Ukraine. At the same time, I was shocked by the unbridled falsity of reports being concocted by the Kremlin-controlled media. These claims were clearly resonating in the West. American media is very U.S.-centric and international events are underreported. This created opportunities for Kremlin-controlled outlets. For example, English-speaking RT (formerly Russia Today), which previously postured as an outlet exposing Western corruption, suddenly became a bullhorn for anti-Ukrainian propaganda. There was no concentrated effort in the Western media to counter these falsehoods. I am a Ukrainian–American and I decided that I could not stay quiet about such injustice. When Russian Foreign Minister Sergei Lavrov recently called the Ukrainian diaspora in the West ‘rabid’, he meant to insult us. Instead, it was effectively a backhanded compliment about our common passion for Ukraine. When the land of our fathers is under attack, we feel compelled to fight back. I took it upon myself to expose blatant fakery and intentional misrepresentations by the Russian press and their Western pawns. I started to select the most important and interesting pieces of disinformation, compiling them into my series: ‘Russia’s Top Lies About Ukraine.’ This collection continues to grow.

Which fakes have proved the most damaging to Ukraine’s international image, and which fakes have backfired most damagingly on the Kremlin itself?

The most damaging fakes affecting Ukraine’s international image are the ones that represent most Ukrainians as Nazis, those that accuse the Ukrainian government of deliberately slaughtering civilians in Donbas, and the multitude of fakes related to the downing of MH17. The fakes that 36

About the interviewee: Julia Davis is a Ukrainian-American investigative journalist and the author of the ‘Russia’s Top Lies About Ukraine’ series backfired most damagingly on the Kremlin are their ridiculous fabrications of the crucified 3-year-old boy in Slovyansk, a similar made-up report of a 10-year old Donetsk girl killed by Ukrainian artillery (debunked by the BBC), and Putin’s ever-changing story about the role of the Russian army in the annexation of Crimea. More recently, Turkey and Germany have become targets of Russian propaganda involving the same pattern of fake news and deliberate disinformation. As a result, other countries have finally discovered the scale of the deceptions used by Russia against Ukraine for so long. This has created an environment where nobody knows whether information coming from Russian sources is credible.

Despite widespread recognition of the Kremlin’s ‘weaponization of information’ and the Putin regime’s tight editorial control over the mainstream Russian media, many international correspondents continue to seek balance by quoting Russian media sources. How can reporters maintain objectivity when covering Russian-related stories while at the same time avoiding becoming unwitting accomplices in the Kremlin infowar?

This is a very serious issue, since Western reporting standards require presenting two sides of the story in an objective manner. However, reporters have an obligation to report the facts, not insinuations or baseless allegations. No correspondent should ever rely solely on Russian media reports. There has to be independent confirmation by a trusted source. It is also important to call things by their true names. In my humble opinion, political correctness has no place in accurate reporting. Crimea is not Russian - it is under Russian occupation. Russian soldiers in Ukraine are not ‘volunteers’. If your main focus is not offending anyone with your reporting, you’re doing it wrong.

You have been actively debunking Kremlin fakes for almost two years now. How has international awareness of Russian disinformation techniques evolved over this period?

International awareness of the Russian information war continues to evolve in leaps and bounds, with a growing number of important initiawww.bunews.com.ua

You have personally exposed hundreds of specific Russian media lies about Ukraine. Thousands more have been broadcast and printed over the past two years. Nevertheless, Russia’s infowar continues virtually uninterrupted, producing fresh fakes on a seemingly daily basis. Why hasn’t such widespread exposure of Russia’s disinformation strategies led to a complete collapse in the Kremlin’s credibility?

The Kremlin’s credibility has definitely suffered, but more efforts are necessary. I believe that the Western mainstream media should start devoting time and attention to Russia’s disinformation campaign. Bigger audiences can be reached through global TV coverage and various video programs. Nevertheless, no matter what we do, the Kremlin press will continue to spread disinformation. It is our responsibility to provide an alternative to their brainwashing. Social media and other Internet-based exposure bear fruit but they are not enough on their own.

Russia has proved extremely skillful at appealing to the margins of Western society and at targeting Western audiences receptive to conspiracy theories. What role has a loss of faith in the international mainstream media played in creating fertile ground for Russian disinformation among Western audiences?

The Western mainstream media is directly at fault for creating this kind of vacuum. When corruption is underreported and legitimate whistleblowers are shunned by the mainstream media, the only opportunity for those stories to be told is via the likes of RT. Of course, Russia fully exploits this to their advantage. Valid stories get mixed in with outlandish conspiracy theories, together with a large helping of anti-Western propaganda. This creates a dangerous cocktail where truth telling serves as the cover for blatant disinformation.

Ukraine’s low international profile made it an unknown quantity that was particularly vulnerable to information attack. Should the priority for Ukraine now be debunking Russian lies or establishing a more positive international image?

Debunking Russian lies about Ukraine is important, but it should be done without being sucked into time-consuming debate over silly fakes. At this point, debunking is about quality, not quantity. The main focus should

be on building up Ukraine’s international image. Too many people in the world still mistakenly believe that ‘Ukraine used to be part of Russia’ or ‘Ukrainians and Russians are the same people.’ Ukraine has to reintroduce itself to the world. Feature films such as the wonderful Oscarnominated documentary ‘Winter on Fire: Ukraine’s Fight for Freedom’, and even fashion coverage of Ukrainian designers in Vogue magazine, help to tell the world about Ukraine and Ukrainians. These efforts have to continue.

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tives to help counter Kremlin disinformation. The creation of the EU’s East StratCom Task Force to counteract Russian fakes is a very important step. The tireless efforts of the Ukrainian StopFake project continue to impress me. The Bellingcat open source investigative group, founded by Eliot Higgins, is amazingly effective. Russian-language online resource Noodle Remover, created by Alexey Kovalev, is also a great initiative. The combined efforts of different debunkers from around the world all play a role in developing understanding of what the Russian media had become after Putin’s covert invasion of Ukraine.

Many journalists who have exposed Russian fakes have themselves become targets of the Kremlin’s information war. Have you been targeted over your articles?

As soon as my articles began to appear I became a target for Kremlin trolls, RT correspondents and Western useful idiots. I regard troll attacks as par for the course. To me, they only mean that I am on the right track.

The ‘block’ button is one of my best friends on social media. As they say, ‘Don’t feed the trolls’. I give no time to negativity and do not allow trolls to sidetrack my efforts.

As someone who grew up in the Soviet Union, how does today’s Russian disinformation compare with the propaganda of the Soviet era?

Propaganda in the Soviet era was infinitely less sophisticated than the Kremlin’s current tactics. In the Soviet Union, we only had a few TV channels and an exclusively Soviet press. The stories were always pretty much the same: the West was at fault for everything that is wrong in the world and the Central Committee of the Communist Party always ‘knew best.’ In spite of the difference in tactics and media outlets, the main idea of the Kremlin media today remains the same: patriotic citizens are expected to go along with the official line. Many Russians realize that their media is lying to them and to the world, just as many Soviets realized they were being lied to. However, they believe that all is fair in the information war between Mother Russia and the West. In that sense, the principles remain unchanged.

It used to be said that the Soviet propaganda experience had made Russian audiences extremely cynical and skeptical, and yet they are now often portrayed as a gullible herd ready to swallow whatever they are told by the Kremlin. How do you explain this apparent contradiction?

The way the news is served up by the Russian media, often spiced up with phony interviews and fake photos, may appear believable to indiscriminating audiences. Those who grew up in the Soviet Union, like myself, became quite skeptical about the veracity of media reporting. At the same time, Russians of that generation are equally as skeptical about the Western media. Therefore, in their minds, “everyone is lying, so what does it matter?” Debunking fakes may not be effective with audiences who believe that this is simply an information war where anything goes.

“Many Russians realize that their media is lying to them and to the world. However, they believe that all is fair in the information war between Mother Russia and the West.”

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Urban renewal opportunities in Kyiv The Ukrainian capital is full of derelict treasures but renovation projects require patience The arguments for urban renewal are not new. In many cities all over the world, this process involves improving the urban landscape by restoring rundown neighbourhoods in a sustainable way to increase a city’s property values and tax base, and to promote urban density and slow the growth of urban sprawl.

Where Kyiv is concerned, one seldom hears much about this topic, despite the presence of large numbers of derelict buildings in the historic central regions of the city. I recently sat down with the team at Urban Curators to discuss their work in this field. Urban Curators is an interdisciplinary Kyiv-based group that works in the fields of urbanism, architecture and cultural management. They assist those who are seeking a vision for utilizing neglected spaces.

Neglected properties in prime locations

A few months ago, Urban Curators did some quick research on derelict historical buildings in Kyiv. In the centre of the city alone, they found more than 65 objects. They then created a map of these properties. It turns out that most of the buildings are located in the so-called Upper City and the riverside Podil region. Among them, the greatest quantity of buildings date from the late nineteenth to early twentieth centuries. This is the so-called late imperial period, for which there is a certain nostalgia.

Kyiv has both residential and industrial buildings in the derelict category. Many of them are now vacant and in different conditions or states of disrepair. What is particularly notable is that these buildings are often street-front properties with prestigious addresses and thus directly affect the city’s image and the value of surrounding real estate. It is difficult to imagine how many derelict buildings lie forgotten inside Kyiv’s vast collection of courtyards.

Islands of urban decay

Whereas urban renewal usually involves restoring entire rundown neighbourhoods, in the case of Kyiv any potential investor should imagine a sea of desirable real estate alongside islands of derelict and neglected historical buildings standing in some of the most desirable prime locations.

The Urban Curators’ map, which they are constantly updating, only indicates derelict buildings in the centre of Kyiv.

This map serves as their database for the development potential of the city centre as they see it today. One of the more interesting examples on the map is a building on Reitarska Street. This unusual Art Nouveau building has an elegant design, sits on a cozy downtown street, and has an interesting history. It was once an estate, a hospital, the Ministry of Health under the Ukrainian People’s Republic, and a university faculty. During the course of its history, the building’s function has changed several times, but it was always connected with health and medicine. Because of this storied

legacy, it would be a shame for the history of this building to end in ruin.

With the right investor, this building could continue to flourish as a city landmark. A new function for the building could be housing or offices, or a combination thereof. A new function could also be dictated by infrastructure (or lack thereof) in the area. For example, if the neighborhood is lacking a corner grocery store or a local cafe, then one could be located on the first floor. In the past decade, shopping and services close to residential areas have become increasingly difficult for Kyiv residents to come by in some central neighbourhoods. However, in order to develop this property, a minefield of regulations and ownership issues must first be navigated.

Current state of Kyiv urban renewal

Today many of Kyiv’s derelict historical buildings are legally classified as ‘architectural monuments’. However, local legislation is so weak that penalties for violations can be easily avoided. This situation has ‘untied the hands’ of unscrupulous investors who in the past would buy a property in the historical centre of the city purely in order to acquire the land, since land in central Kyiv has a high commercial value. Usually a historical building would then be allowed to deteriorate so that it could be condemned and demolished in order to build something new and better in its place, regardless of any opposition by city residents.

Despite more than 20 years of Ukrainian independence, the concept of urban renewal in Kyiv is still in its infancy and there are relatively few good examples of successful and proper restoration and rehabilitation of historical buildings. On the other hand, this situation creates opportunities for pioneering investors, particularly those who have a successful track record upgrading historical buildings. A project that maintained and restored Kyiv’s historical heritage would set a successful precedent and provide an investor with reputational capital for future projects.

Ambiguity clouds ownership issues

Not surprisingly, some of the challenges to urban renewal lie in the nontransparency of administrative processes and the fact that important information about a property is often non-public. Searching for the owner of a building can be an extremely bureaucratic process, while the procedures for obtaining information are generally complex and opaque. This situation creates many opportunities for corruption. Often the owners of buildings and land in Kyiv are public figures (national or municipal deputies, for example), so the legal ambiguity of the current situation is extremely convenient for them. One could even say there is an unofficial club of people who own a significant amount of property in the city. Today many of these owners do not invest in the redevelopment of these historical buildings because it is not financially feasible or convenient for them.

Another complication appears in cases where it transpires that a building and the land on which it is located involve different forms of ownership.

For example, a plot of land could be owned by the state or municipal gov-

About the author: Tim Louzonis (tim@aimrealtykiev.com) is a co-founder of AIM Realty Kiev, a real estate agency that specializes in real estate for foreign expats. Tim is a long-time expat with Ukrainian roots; he first came to Ukraine as an exchange student in 1993 and returned in 2008

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ernment under a long-term lease, while the building owner might be an individual or legal entity.

Nor does the fun end there. Even if one manages to identify the owner of an historical building or the land under it, in many cases the ownership documents indicate the company that owns the property but do not disclose the ultimate owner and decision maker. The quest to identify the ultimate owner of a property can quickly transform into a never-ending Herculean task.

There are a number of different ways to acquire partial information about a property. For example, the Kyiv Department for Urban Planning and Architecture has created a website (http://mkk.kga.gov.ua/). However, this contains only limited information, and to obtain additional info on ownership one is required to submit a separate request. Some local NGOs can February 2016

provide assistance in obtaining property info. The office of electronic services of Ukraineâ&#x20AC;&#x2122;s Ministry of Justice is also a place where one can submit an inquiry regarding ownership of a building or land.

Taking the long view

There are many good reasons why urban renewal in Kyiv is still in its infancy. While the amount of opportunities may seem enticing on paper, these opportunities are only for a determined investor who can afford to take a long-term view and who is prepared to work diligently and patiently with local experts to overcome considerable obstacles. The streets of the Ukrainian capital are full of potential treasures waiting for renovation, but there are good reasons why such projects often take years to bring results.

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Can foreign filmmakers boost Ukrainian cinema renaissance?

Ukraine’s emerging popularity as international filming location could help domestic cinematography

Can the growing international popularity of filming on location in Ukraine help harness the country’s cultural potential, reinvigorate the local film industry, and promote Ukraine in the global arena? According to three international filmmakers, the outlook is promising.

Ukraine played an important role in establishing the visual vocabulary of global cinematography, yet for many years, the country’s film culture has remained in splendid isolation from the global movie market. Today, as a new wave of Ukrainian cinema slowly

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emerges, spearheaded by Myroslav Slaboshpytskiy’s multiple award-winning movie ‘The Tribe’ (2014), a growing number of international directors are trumpeting to the country’s great cinematic potential.

Shadows of Forgotten Ancestors: Ukraine’s stunning cinematic legacy Few countries can rival Ukraine’s far-reaching cinematic legacy.

World-famous cinema directors such as Sergei Eisenstein and

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:

Photo: Courtesy of FILM UA and Wild Tribe Films cultural diplomacy

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: Dziga Vertov laid down the foundations of world cinema in such key

Thanks to the National Oleksandr Dovzhenko Film Centre and the Ukrainian State Film Archive, a new generation of Ukrainian filmmakers, critics, and film lovers is rediscovering the country’s cinematic legacy. The centre’s dynamic manager Ivan Kozlenko has turned the crumbling industrial estate into a thriving arts venue, and a member of the International Federation of Film Archives.

Meanwhile, the image of Ukraine that was presented in such foreign films as ‘Lord of War’, ‘Everything is Illuminated’, ‘Transformers’, ‘Import/Export’, and ‘Tomorrowland’ was that of a backward postSoviet wasteland, with the arms trade, prostitution and human trafficking depicted as the predominant national industries. It seems like there is no time like the present to challenge, or at least diversify, that impression.

Great expectations: Present challenges, future prospects

For the first time in over two decades, we can tentatively speak about a veritable revival of Ukrainian cinema. Much of the progress is due to the new blood flowing in, both in the creative and in the administrative sectors. The Ukrainian State Film Agency, Derzhkino, which functions under the Ministry of Culture, is the primary government body tasked with developing the economic and legal basis for film production in Ukraine. Headed by Philip Ilyenko, the son of the famous director Yuri Ilyenko, Derzhkino’s image has Photo: Courtesy of FILM UA and Wild Tribe Films

works as ‘Battleship Potemkin’ (1925) – with its famous scene on the Odesa steps – and ‘Man with the Movie Camera’ (1929), also set in Odesa. The Ukrainian SSR played an important role in Soviet film production, with four major film studios and a host of such notable directors as Oleksandr Dovzhenko, Larisa Shepitko, Yuri Ilyenko, and Sergei Parajanov (whose 1965 film ‘Shadows of Forgotten Ancestors’ recently became part of the Harvard Film School curriculum). Kira Muratova’s experimental films bridged the divide between Soviet and post-Soviet cinema, yet for the past two decades Ukrainian cinema lacked definition, with few films produced and even fewer making it to international film festivals, let alone commercial distribution.

The authoritarian system of the Soviet era presented numerous challenges to creative work, including censorship, persecution, and the ‘insulation’ of national cultures through Russian dubbing when distributing across the USSR. The Soviet authorities invested generously in film production and film education in a range of profiles – from features to documentaries, from television musicals to agitprop reels. Lenin himself noted that ‘of all the arts, cinema is the most important’. The Soviet film industry was financed exclusively through state commissions, and in their absence, the Ukrainian national film industry was virtually annihilated in the early independence years.

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Found in translation: foreign filmmakers on working in Ukraine

International co-productions could certainly offer a much-needed boost to the Ukrainian film industry. Three foreign film directors who have worked in Ukraine shared their experiences with Business Ukraine magazine. According to them, Ukraine has a number of critical advantages: the full range of technical facilities and services are here and are available at a fraction of the cost.

French director Olias Barco

Olias Barco is a French director who splits his time between France, Belgium, and Ukraine. When he visited the Odessa Film Festival several years ago, he struck up a friendship with Dennis Ivanov, producer and distributor of ‘The Tribe’. This friendship led to his biggest project to date, a surreal coming-of-age tale called ‘Polina’, filmed entirely at FILM.UA studios in Kyiv with a predominantly Ukrainian cast and crew. “I had nursed the idea for the film for several years and spent three years on casting, but it was only here in Ukraine that everything fell into place,” he says. “We could build any set that we wanted to – but in fact, we used much of the Viking set, as well as parts of the city’s architectural landscape. The post-production, which is still ongoing, is of an exceptionally high standard.”

Since this initial experience, Olias has put down roots in Ukraine and has great plans for many more creative projects in the country as a director, producer, and photographer. He has made promoting Ukraine’s creative potential his mission, and regularly voices his fascination for Ukraine in the international media, inviting many of his renowned creative friends and colleagues to visit him here in search of prospective collaborations.

American director Chad Gracia

For the director of the Sundance Grand Jury winner ‘The Russian Woodpecker’, a movie that follows eccentric artist Fedor Alexandrovich on a conspiracy trail around the Chernobyl disaster, Ukraine was a chance discovery. “I initially came to Kyiv to work on a theatre production based on Tolstoy’s Anna Karenina in January 2014. It

was a joint project with the National Academy of Fine Art, and it is there that I met Fedor, the set designer,” explains American director Chad Gracia. “He would pull me aside during rehearsals and rattle off his bizarre suspicions about the true origin of the Chernobyl disaster.” When citing the advantages of working in Ukraine, he says that ‘it is the only post-Soviet society where [he] felt completely safe.’ For him, Ukraine today is ‘the most important place’, where the final battle of the Cold War takes place. The long history of Ukrainian film and cinema is a major attraction: he cites ‘tonnes of great talent’ – including his own cinematographer Artem Ryzhykov – and while he is reluctant to reveal the film’s budget, says that production and post-production cost him only about a fifth of what it would otherwise have been in New York City.

cultural diplomacy

smartened up in recent years as Ilyenko has established a more prominent presence for Ukrainian cinema at major international film festivals. Crucially, he has also made provision for Englishlanguage consultations to foreign production companies looking to work in Ukraine. Moreover, over 50 feature films where funded by the state in the past three years, Slaboshpytskiy’s ‘The Tribe’ among them.

Ukraine’s up-and-coming filmmakers are becoming more resourceful, applying for funding abroad as well as fundraising privately. Today, there are dozens of Ukrainian production companies employing modern practices in fundraising, marketing, and promotion. For now, the goal is to stay in the black. If Ukrainian filmmakers play their cards right, there can be considerable returns to their investments in the coming years. The key is establishing long-term working relationships with agents abroad that could help to promote successful features on the international market.

Danish filmmaker Jonas Elmer

For seasoned Danish filmmaker Jonas Elmer, who has a number of award-winning feature films and over a hundred commercial productions under his belt, Ukrainian crews and talent have been the most interesting to work with. “I feel that the Ukrainian people are in general nice and easy to talk to. When you do commercials, politics is often involved – but here I can be myself when I work.” He first started coming to Ukraine about 5 years ago when his agent in Denmark got him involved in some commercial work for the Russian market. Since then, he has come 20-25 times. According to Jonas, who has worked in Denmark, Germany, and Spain, the film crews in Ukraine are of a very high standard and most speak English. The equipment is professional, and the sets are brilliant. “Quite often, we don’t have to build anything additional, and we just leave things as they are. The possibilities here are huge. In Denmark, the state annually gives about EUR 5 million for film production, with 20-25 films released. I would like to see the Ukrainian government giving more support to Ukrainian filmmakers. Why haven’t we heard about any of the Ukrainian films that are being produced?” When asked whether he would consider returning to make a feature in Ukraine, he says that it would be an absolute luxury.

Time to build on Ukraine’s rich cinema heritage

The impact of Ukrainians on global cinematography is rich and diverse. It is now in vogue among Hollywood A-listers to cite Ukrainian heritage: Stephen Spielberg, Sylvester Stallone, Johnny Depp, Leonardo DiCaprio, Dustin Hoffman, Michael Douglas, Natalie Wood, Wynona Ryder, Mila Kunis, Mila Jovovich, and Whoopi Goldberg have all made their mark in Hollywood while claiming ancestral ties to Ukraine. Hopefully the current generation of Ukrainian filmmakers will make as much of an impact on world cinema in the years to come. The presence of growing numbers of international filmmakers in the country would certainly help to get the word out about Ukraine’s wealth of cinematic talent.

About the author: Myroslava Hartmond is the owner of Triptych: Global Arts Workshop (www.t-gaw.com), Ukraine’s first private fine art gallery since 1988, and a Research Associate of the Centre for International Studies, University of Oxford, where she explores the role of cultural diplomacy in Ukraine February 2016

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Networking events

Art Inspired by the Spirit on Maidan Diplomats and art lovers gathered at the Hungarian Embassy in Kyiv at the end of January for the opening of an exhibition

by Ukrainian artist Olha Bosak entitled ‘Live Free!’ that was supported by the Hungarian, Austrian and German embassies.

Abstract artist Bosak has earned a reputation in Kyiv arts and society circles for her vivid impressionist prints. She explained that the inspiration for this latest ‘Live Free!’ collection of works came from Ukraine’s struggle over the past two years to shed the country’s Soviet past and return to Ukraine’s European roots.

“Our freedom has been acquired at a very high price. One hundred or one thousand years from now, our descendants will look back on the heroes of this early twenty-first century period as we look back on the heroes of the Battle of Kruty today,” Bosak commented in reference to the early twentieth century battle involving Ukrainian students defending Kyiv from overwhelming numbers of invading Bolshevik troops.

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networking events

Turkish Community Welcomes New Turkish Airlines GM Members of Ukraine’s burgeoning Turkish business community gathered in downtown Kyiv in February for a dinner to say farewell to outgoing Turkish Airlines General Manager for Ukraine Hakan Yilmaz, and to welcome his successor Dincer Sayici. The dinner was hosted by TUID, the Turkish-Ukrainian Business Association, and was attended a range of Turkish executives and entrepreneurs along with friends of the Turkish business community.

Turkish Airlines is Ukraine’s leading foreign international carrier and is scheduled to begin a new flight service connecting Istanbul with western Ukraine’s Ivano-Frankivsk in March.

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Fryday Fun at Kyivâ&#x20AC;&#x2122;s Gulliver Complex On 19 February, Fryday Afterwork took over the 7th floor of the Gulliver shopping mall in the heart of the Ukrainian capital city. Fryday Kyiv, in partnership with Oskar Cinema and Hitchcook Bar, hosted hundreds of local and international professionals at the event. Follow Fryday Kyiv on Facebook for news of the latest social events and networking opportunities.

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February 2016

Bellingcat report implicates Kremlin in MH17 attack Open source internet investigators name Russian soldiers suspected of downing civilian airliner UK-based online investigation team Bellingcat released a new report in late February naming a number of Russian soldiers suspected of involvement in the July 2014 downing of civilian flight MH17 over east Ukraine. The 115-page report was compiled using open source data including information taken from social media sites. It identified dozens of Russian army personnel thought to have been personally involved in the shooting down of the aircraft.

Bellingcat has been at the forefront of efforts to uncover evidence of the Russian military’s role in the tragedy, which led to the deaths of all 298 passengers on board the Amsterdam to Kuala Lumpur flight. This latest report is the most explicit yet – as well as naming a number of Russian soldiers and officers, it also claims the Kremlin bears the main responsibility for the attack. Bellingcat founder Eliot Higgins spoke to Business Ukraine magazine about his work investigating MH17.

As commander-in-chief of the Russian Armed Forces, Vladimir Putin would bear ultimate responsibility for the deployment of Russian forces in Ukraine. Do you think there is currently enough evidence to place Putin himself on trial?

Without knowing what the joint investigation team has, it is difficult to make that judgment. Either way, it would be a miracle if Putin ended up in the dock.

Your work exposing suspected Russian involvement in the MH17 tragedy has made you a target of online abuse. Has the tone of the response surprised you, and how have you coped with the personal nature of these attacks?

I used to write on Syria a lot, and the tone of Assad defenders is no different to that of Putin defenders, so it was not surprising. What did surprise me was how aggressive Russia Today was. I expect a certain pretense of professionalism and neutrality from them, but even by their own low standards, their attacks on Bellingcat and myself were quite surprising to the point of unintentional selfparody.

The Russian media campaign surrounding MH17 has served as a wakeup call for many people who might otherwise have remained ignorant of Kremlin disinformation techniques. In this sense, Russian efforts to deflect blame for MH17 have been counter-productive. Why do you think the Kremlin has been so relentless in its efforts to muddy the waters of the MH17 investigation, even if this has proven detrimental to the country’s broader international credibility?

Because that is how they have always worked, and it is what had worked for them in the past. The problem is now they have less control of the message and can be more easily exposed as liars. The only counter is to start telling the truth, which seems to be an alien concept to the Russian government. Even if they did, who would trust their word alone at this point?

The MH17 investigation has become a battleground for conspiracy theorists. Many continue to promote long-since discredited ‘facts’ regarding the presence of Ukrainian jet fighters, mysterious Spanish air traffic controllers and so forth. What has your experience of the theories surrounding MH17 taught you about the conspiracy culture of today’s internet-driven information environment?

Basically what they are saying is “I’m smart and you’re dumb”, so anything that 48

About the interviewee: Eliot Higgins is founder of Bellingcat, visiting research associate at King’s College London, and nonresident Senior Fellow for New Information Frontiers at the Atlantic Council challenges this is dismissed as being part of the conspiracy, otherwise they’d have to admit they were dumb all along. The only people who take them seriously either have an agenda, want to make money off them, or are other conspiracy theorists. The best they can hope for is recognition on Russia Today or Sputnik.

During his December 2015 annual press conference, Vladimir Putin stated: ‘We have never denied that there are (Russian) people in east Ukraine undertaking tasks, including of a military nature.’ Many chose to interpret this as a change in policy away from previous Kremlin denials regarding a Russian military presence in east Ukraine. You have focused much of your efforts on exposing this military presence. Based on your knowledge of the evidence, do you think that the Russian policy of blanket denials is tenable in the long term? Do you expect Putin to move gradually from denials to public recognition of the Russian military role, as he did over Crimea?

I think more and more people and resources are being focused on open source investigation, so, broadly speaking, these kinds of denials will be more rapidly questioned and debunked. As for Ukraine, in face of all the clear evidence, I would be embarrassed if I had to lie like Putin does about Russia’s involvement in Ukraine.

Critics of Bellingcat have sought to question the group’s qualifications to handle complex data analysis. How would you characterize the response you have had from the international intelligence community to your work?

I’ve been told anecdotally by people with these sorts of connections that it’s been very well received. We certainly have a lot of interest in the work Bellingcat does from a wide variety of organisations outside of the intelligence community.

Bellingcat has made headlines by analyzing open source materials that are publicly available online. What security lessons should military professionals learn from your ability to make significant breakthroughs using open source information?

Either stop lying or become better liars. Also, learn how to do this yourself, as it does not look like soldiers will stop posting selfies anytime soon. www.bunews.com.ua

9 Years of Ukrainian History 8 n Politics: Anyone looking to take the pulse of Ukrainian democracy needs to look beyond the bright lights of the capital n n Industry: Outdoor sector leading advertising market upswing n Interview: Walid Arfush on the need to shake up state TV n

n Politics: As President Yanukovych consolidates grip on power is Ukraine’s fledgling democracy strong enough to survive? n n Real Estate: New re-registration process eases developer concerns n Franchising success of Ukraine’s pop art pizza king n

Volume 4, Number 3 March 2010

Volume 4, Number 4 April 2010

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VICTORY

wanted:

green shoots

Russia’s regional resurgence receives a fresh boost on the eve of Victory Day celebrations as Ukraine’s new government agrees to 25-year Sevastopol lease extension in return for cheap gas supplies

With a new government in place in Kyiv and international markets finally showing signs of modest growth will spring 2010 bring with it evidence of a Ukrainian economic recovery?

CHAMBER

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The Chamber Newsletter is produced in association with:

CHAMBER

NEWS

Ukraine’s monthly English-language current affairs magazine since 2007

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LURE OF LEOPOLIS MONT WANTED: EURO RE ‘European’ in hailed as the most New parliament this EU integration optimism? entary Elections: justify 2014 Ukrainian Parliam- will the new intake of MPs the country’s history

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Ukrainian civil society ‘still 30 years behind the West’ Civil society reform still required despite key role played by NGOs in Euromaidan Revolution Ukraine’s thriving civil society sector played a major role in the Euromaidan Revolution and has since mobilized to support efforts to resist Russia’s hybrid war in Crimea and eastern Ukraine and help facilitate the reform process initiated by the revolution. The country’s NGO environment is widely acknowledged as being far more dynamic and buoyant than its counterparts elsewhere in the former USSR, yet it continues to suffer from limited resources, management issues, and restricted access to state structures and private sector financing. Business Ukraine magazine discussed the state of Ukrainian civil society with Brian Ziegler, an American civil society professional who has been working in the Ukrainian NGO sector for the past two years.

What first brought you to Ukraine?

I came to participate in the revolution by strengthening the capacity of civil society and its actors, and to locate my family’s ancestry. My ancestors emigrated from Ukraine to America back in the late 1800s.

What are your core activities in Ukraine?

I focus on working with Ukrainian NGOs, higher education institutions and INGO affiliates to develop their capacity and better equip them to develop partnerships with government and business. I also try to help them meet international community performance standards.

How did Ukrainian NGOs affect the outcome of the Euromaidan Revolution and the earlier Orange Revolution?

There has been a fourfold increase in the number of NGOs working in Ukraine since the Orange Revolution. They have greatly increased the intellectual and pragmatic ability of Maidan to help create a free and democratic society in which all Ukrainians can prosper. If these revolutions do finally achieve their goals, it will be due in large part to the NGO community.

How resilient have the NGOs that sprung up during the Euromaidan Revolution proven?

Not very. At present, they basically operate as direct donors with their sponsors and show little ability to operate on their own as fully functioning NGOs.

How important has the NGO sector proven in Ukraine’s struggle against Russia’s hybrid war?

Many Ukrainian NGOs serve as a social safety net in addressing and caring for the country’s displaced people. They have also partnered with pro-democracy governments, think tanks and international donors to provide a support and oversight system for the Ukrainian government. NGOs have been, and remain, critical in supporting the Ukrainian government during this hybrid war.

What are the current overall statistics for Ukraine’s NGO sector?

There are currently over 100,000 NGOs officially registered in the country but this figure is not entirely accurate. One study suggests that almost half of these may be inactive. When you look at officially registered NGOs that have one or more staff member, the number falls to less than 14,000. Mean-

About the interviewee: Brian Ziegler is a non-government organization (NGO) consultant who has worked with America’s preeminent NGOs and high wealth individuals and now resides in Kyiv where he is President and CEO of NGO Design and Development Associates while, we currently have about 700 INGOs operating in Ukraine. This is part of a USD 2 trillion annual worldwide social enterprise industry. The growth model for new NGOs entering or being established in Ukraine over the next ten years suggests that we will see the real total climb to over 80,000.

How do Ukraine’s NGOs compare to those in Western Europe and North America?

Ukrainian NGOs are about thirty years behind the West in terms of their development and capacity. They lack proper board leadership, membership, and working subcommittees. Staffing is rarely with NGO professionals. Underwriting is mostly singular and not board based. Strategic and tactical plans are almost unheard of, despite the fact that this is critical to the success of any enterprise. Transparency is also a key area in need of improvement. Having said all that, with time and proper resources, Ukrainian NGOs will be high preforming in very short order.

What type of legislation can the government provide to assist in the development of NGOs in Ukraine?

The approach should be threefold: current legislation needs to be rewritten to better reflect the modern-day structure of NGOs and not a social membership type organization, as the legislation from the Soviet days does. Increased reporting standards with respect to quarterly and annual reports for the government and donors are important for transparency and accountability reasons.

An overhaul of the current tax deductions for individuals and businesses donating to NGOs in needed to better stimulate donations for NGOs.

How can Ukraine’s NGOs do a better job of partnering with businesses?

They need to have a strategic and tactical plan. They must provide a list of board members and their roles. They need to do simple things like listing the organization’s accomplishments and following proven cause-related marketing approaches when designing proposals. And always remember, the main business of potential partner businesses is not rescuing your NGO.

Cosmos Ojukwu is a Kyiv-based Nigerian journalist who has been covering Ukrainian affairs for more than a decade

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Ukraine’s Crimean Tatar Eurovision song will embarrass Putin Jamala’s ballad ‘1944’ challenges myth of ‘Russian Crimea’ while reminding world of Soviet crimes The Russian occupation of Ukraine’s Crimean peninsula looks set to become one of the talking points of the 2016 Eurovision Song Contest after Ukrainian TV viewers selected Crimean Tatar singer Jamala’s haunting ballad ‘1944’ to represent the country at this year’s event.

Although ostensibly a tribute to the victims of the 1944 Soviet mass deportation of the Crimean Tatars, the song will inevitably draw international attention to the ongoing plight of the Crimean Tatars, who have suffered a range of human rights abuses since the Russian seizure of Crimea in early 2014.

A nation of Eurovision connoisseurs

Ukrainians take Eurovision seriously. The annual race to see who will represent the country attracts significant media attention and is the subject of heated debate. Many of the country’s top pop performers compete for the privilege of singing Ukraine’s entry, and they tend go on to do well in the finals. Lviv legend Ruslana famously won Eurovision in 2004 with her ‘Wild Dances’, while drag act Verka Serdyuchka became the most memorable runner-up in the competition’s history with his iconic 2007 eurotrash disco classic ‘Russia Goodbye’.

The 2016 national competition was particularly heavily laden with expectations. The hyper-patriotic Ukrainian response to Russia’s ongoing hybrid war helped amplify the excitement surrounding this year’s selection process, with millions tuning in to the televised semi-finals and final of the 2016 contest. Jamala eventually won by virtue of overwhelming TV viewer support, claiming the largest share of almost 400,000 individual phone votes.

Her victory should guarantee Ukraine a generous share of the limelight at this year’s Eurovision Song Contest in Sweden. While Eurovision is supposed to be completely apolitical, Jamala’s thinly veiled political anthem will attract considerable attention in the buildup to the contest. Eurovision organizers have promised to rule on whether the song infringes the ban on political content following the contest’s entry deadline on 14 March.

Promoting the new Ukraine

The international media coverage Jamala is already attracting could well prove a significant PR victory for Ukraine as well as a considerable em52

barrassment for the Kremlin. As a practicing Muslim and a member of an ethnic minority, Jamala is in many ways the ideal person to represent the multicultural tolerance and inclusiveness of the new Ukraine. She is also the perfect antidote to Kremlin scare stories about marauding Ukrainian Nazi hordes.

From a Russian point of view, she could hardly be less suitable. Russian politicians have already called on Eurovision to ban Jamala’s song. It is not difficult to see why they object so strongly. As well as debunking the myth of fascist Ukraine, Jamala’s presence as Ukraine’s representative at Eurovision 2016 will also serve to remind European audiences that not everyone in Crimea cheered the Russian takeover. The deteriorating plight of the Crimean Tatar community in the occupied peninsula has already become a focus of international concern. The attention Jamala garners will only add to this process.

The song’s subject matter is also an awkward choice for the Kremlin. Vladimir Putin has made the glorification of the Soviet Union’s victory over Nazi Germany one of the cornerstones of his efforts to rebuild Russian national pride in the wake of the 1991 communist collapse. This has necessitated the partial rehabilitation of Stalin. As a result, new monuments to the Soviet dictator are

currently popping up across Russia, while his portrait is on prominent public display throughout the Kremlin’s puppet republics in east Ukraine.

Jamala’s powerful ballad will highlight one of Stalin’s many industrial-scale atrocities – the mass deportation of approximately a quarter of a million Crimean Tatars in 1944. Jamala’s family were among the victims, adding extra poignancy to her performance. Relatively few Europeans are fully aware of the Soviet Union’s crimes against humanity, but Jamala’s song may lead to greater interest in the subject. At the very least, it will introduce a new generation of viewers to the idea that Hitler was not the only genocidal maniac terrorizing Europe in the 1940s.

Can Jamala’s historically pregnant and geopolitically loaded tune actually win the 2016 Eurovision Song Contest? Critics have argued that it is the wrong fit for a competition better known for its kitsch glamor and bubblegum pop. This assessment may prove to be true, but as columnists across the continent look for material to fill their Eurovision 2016 previews, Ukraine’s Crimean Tatar entry is likely to be a particularly popular theme. This will be a victory in itself, raising Ukraine’s international profile and reflecting the country’s diversity while highlighting the realities of Putin’s hybrid war. www.bunews.com.ua

Charity cheer at Kyiv Burns Night celebration Kyiv Lions Club gala event aims to raise money for Ukraine’s most deserving good causes

On 19 March, Kyiv’s Hilton Hotel will play host to the 21st Burns Night – a traditional Scottish celebration that has earned a special place on the Ukrainian social calendar. Ukraine’s annual Burns Night party is the work of the Kyiv Lions Club and serves as the charity organization’s biggest fundraiser, generating tens of thousands of dollars each year for good causes in Ukraine.

Tickets for this year’s Burns Night party have already sold out but event organizers still hope to attract additional corporate sponsors in order to raise as much as possible for a range of worthy causes including military hospitals and internally displaced Ukrainians. Business Ukraine magazine caught up with current Kyiv Lions Club President and Burns Night inspiration Stuart McKenzie to ask him what we can expect from this year’s event.

What innovations do you have planned for the 21st Kyiv Burns Night celebration?

This year Burns Night will be engaging the full international community to raise money for people in need in Ukraine. The main theme of the event is ‘Clans of the World’, so it is going to be a very international event in every sense. Burns Night 2016 will bring people together from all over the world to celebrate their countries while also raising money for charity.

Burns Night is one of the biggest annual fundraising events for Kyiv Lions Club. What will be the key focuses of your charitable efforts for 2016?

Burns Night is actually the largest annual fundraising event of Kyiv Lions Club. This year, KLC activities will be focusing on children, the elderly, the handicapped, displaced people and military hospitals in Ukraine.

The Kyiv Lions Club has a reputation as one of the most trustworthy charitable organizations in Ukraine. How do you maintain these high levels of trust?

Over the years, KLC has built up a reputation for trustworthiness by being 54

transparent and making its financial accounts open to the public. We make decisions collectively on how to use the money we raise – no one individual gets to decide where the money goes and everything is out in the open. Trust is not given – it has to be earned.

How have the economic challenges currently facing Ukraine affected your ability to find sponsors and partners for Burns Night?

The biggest noticeable change has been that people currently have less funds available for sponsorship. Nevertheless, they are ready to offer other things like products and services and are still very much willing to support good causes in any way they can.

Burns Night is one of the longest running events on the Ukrainian expat calendar. In your estimation, how many guests have attended the event since the very beginning in the 1990s?

Altogether, we have sold around 7000 Burns Night tickets over the past 21 years. The list of attendees features a diverse range of people from all over the world including ambassadors, politicians, celebrities and many more.

This year, tickets sold out six weeks before the event itself, which reflects the enduring popularity of the Kyiv Burns Night celebration. On behalf of the Kyiv Lions Club, I would like to thank all our sponsors and partners for supporting us and helping us to reach our goal of providing help to those in Ukrainian society who need it most.

Kyiv Lions Club: Burns Night 2016

19 March from 19:00 Hilton Kyiv Ballroom Sponsorship inquiries: please contact Marina Karpachova on +38-067-3215999 or karpachova@gmail.com www.bunews.com.ua

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Foreign politicians confirm Ukraine as rightful heir to Kyiv Rus Ukraine’s policy of appointing foreigners to senior government positions has been one of the boldest and most controversial steps taken by the country’s post-Euromaidan authorities. Critics have slammed the trend as an insult to the Ukrainian nation, claiming that it implies a complete lack of suitably qualified local candidates. Supporters have tended to counter this argument by pointing to the strong performance of most foreign appointees, and the absence of corruption allegations surrounding them.

While the relative merits of recruiting foreign specialists into government remains the subject of heated debate, few have recognized the historical dimension of the issue. After all, if we are to believe the ancient chronicles, the entire Kyiv Rus state arose thanks to similar experiments in governance. According to ‘The Tale of Bygone Years’, which is widely acknowledged as the primary source of information on the origins of East Slav civilization, the foundations of the Kyiv Rus state lay in an invitation to foreign tribal leaders to take over the running of what was a naturally wealthy but chaotic region. “Our land is great and rich, but there is no order in it,” recounts the chronicle.

“Come to rule and reign over us.”

This ninth century appeal to a group of Scandinavians would eventually result in the creation of the Kyiv Rus state, which in turn became one of the mightiest powers in early medieval Europe. There are clearly question marks over the credibility of this account, given the fact that it appeared centuries later and was written to order for Kyiv princes who traced their ancestry directly to the Scandinavian recipients of the alleged invitation.

Nevertheless, it remains the founding myth of East Slav civilization and the cornerstone of the heritage which modern Ukraine, Belarus, and Russia all lay claim to.

For centuries, mainstream histories in most

countries unquestioningly accepted Moscow’s claims to be the sole heir of the Kyiv Rus state. However, there is little beyond Orthodox Christianity that the modern Russian state appears to share with ancient Rus. The political traditions in today’s Russian Federation and the long-standing Russian preference for authoritarian strongmen both point directly away from the Kyiv Rus inheritance and towards the legacy of the Mongol yoke, when Muscovy first rose to prominence by doing the bidding of the Khans. Indeed, Moscow did not appear on the map until the twilight years of the Kyiv Rus and played no role in the state’s heyday. Russia’s famously antagonistic and insecure attitude towards Europe is also at odds with the sophisticated continental diplomacy of the Kyiv Rus state, epitomized by Kyiv Prince Yaroslav the Wise’s marriage policies, which earned him the unofficial title ‘Father-in-Law of Europe’.

The emergence of independent Ukraine over the past two and a half decades has sparked an ongoing battle with Russia over the Kyiv Rus legacy. Ukrainians accuse Russia of stealing their history, while Russians scoff contemptuously at Ukrainian pretentions.

Like all historical controversies, this one has no definitive answer. Even so, Ukraine’s claim to be the heir to the ancient Rus state has very real contemporary political resonance because it provides the Ukrainian nation with a thousand-year inheritance that flatly contradicts Kremlin attempts to portray it as an ‘artificial nation’ with no history of its own. This is something opponents of Ukraine’s current crop of foreign-born ministers and state officials might want to bear in mind. Far from being a shameful departure from political norms or an indication of Ukraine’s inability to govern itself, the decision to recruit international experts is actually very much in line with the oldest traditions of Ukrainian statecraft.

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