"Investing in Ukraine is essential; we have great potential for development": Yevhen Savchenko on investing during wartime

24.10.2024

Ruslan Shostak, president of TERWIN

Several historians who have studied wars have said that they have never seen a war where economic forums are being held just 100 kilometers from the front line, and an economy continues to exist. I want to add a bit of positivity to our government, which has created conditions where we can exist, and we can talk about how our companies operate and how our economy grows during the most terrible war when the most powerful army in the world has come to subdue a small country. And this is truly a miracle. We should write a book about it and study it in the future.

When discussing investments, we see only internal ones, primarily from companies already operating in Ukraine. They invest thanks to the money they earn or, in part, thanks to credit, which continues to exist in Ukraine. To me, it still feels like a miracle: in a country at war, there is still lending, great programs, internal investments, and many companies working and earning money.

Now, a bit of negativity to balance the positive. I see great potential in tax collections because 40-50% of the market, depending on the industry, operates in the shadows. This greatly hinders white and strong companies from continuing to grow, paying taxes, and increasing their potential. For example, our group alone has paid about 4-5 billion UAH in taxes since the beginning of this year. Overall, during the years of war, we have invested around 10 billion UAH. So, I have the right to speak because there are companies in the country today with the same capacity as ours but that pay absolutely nothing. The world cannot exist this way, and neither can a transparent economy. If we continue raising taxes only for those companies that truly pay them, they will simply leave the market. And the space they vacate will be filled by companies that don’t pay taxes, leading to the country losing billions.

Ukraine has enormous potential, but the biggest challenge for us is the lack of large and long-term funds. We cannot access loans for 20-30 years at low interest rates. Our mindset, like that of most businesspeople, is very short-term. We think in terms of a three-year loan, and if it pays off, we move forward.

Ukraine is the worst country in Europe when it comes to utilizing working capital. This is because we don’t have the funds to upgrade our enterprises or build high-quality, modern technological facilities. If the state and the banking sector can address this, and if we as businesses can obtain such loans and find these funds, then we can enter any economy. I am an ambassador for a 1 trillion GDP in Ukraine, and I am confident that it can be achieved. I see the internal potential in the country. It is enormous.