POLAND IN UKRAINE
BUSINESS UKRAINE MAGAZINE 08/2018: This month’s issue focuses on bilateral ties between Poland and Ukraine. With special thanks to the Director of the Polish Institute in Kyiv Bartosz Musialowicz. Cover image: the White Elephant Observatory in the Ukrainian Carpathian Mountains (Photo: Ukrainian Communication Group, commissioned by the Polish Institute in Kyiv)
Russia understands Ukraine’s geopolitical importance but does the West? As Ukraine prepares to mark five years since the start of the country’s Euromaidan protests, the repercussions continue to reverberate across the globe. What began as an ordinary protest movement soon morphed into a revolution that sparked a Russian invasion and ushered in a new Cold War. Ukraine’s revolutionaries may not have entirely succeeded in transforming their own country, but they have made their mark on the wider world. Without Euromaidan, Russia and the West would still be engaged in business as usual and everybody would be far too busy making money to dwell on the ugly realities of the Putin regime. With no Kremlin hybrid war, it is entirely plausible there would be no Trump presidency and no Brexit. Putin would not have undergone his metamorphosis from world leader to Bond villain, and Salisbury would still be a sleepy English county town with a pretty cathedral rather than the scene of Europe’s first chemical weapons attack since WWII. There would be no schism in the Orthodox Church and no NATO buildup in Central Europe. We would most certainly not be talking about annexations and the redeployment of nuclear weapons. Meanwhile, Kremlin trolls would be curious footnotes of domestic Russian policy rather than shock troops in a global information war. If nothing else, the aftershocks of Euromaidan should have taught us to take Ukraine more seriously. However, there is little evidence to suggest this is the case. Instead, the ongoing conflict in Ukraine has slipped down the international agenda and all but disappeared from the global headlines. When mentioned at all, it is generally in the guise of “Europe’s Forgotten War”. International commentators elaborating on Russia’s reemergence as a hostile state tend to skate over the Ukrainian origins of the current crisis, while Western leaders meeting with their Kremlin counterparts often seem eager to discuss anything but Ukraine. This is not a new phenomenon. The Western world has been overlooking Ukraine with remarkable consistency for at least a century. When Ukraine made its first statehood bid in 1918, the victorious allies of WWI gravitated between indifference and outright hostility. There would be no place for an independent Ukraine among the many new nations christened at Versailles. Instead, the country’s fledgling leaders came under intense pressure to align themselves with the White Russian cause and stop being so difficult. Seventy years later, US President George Bush visited Ukraine on the eve of the Soviet collapse and delivered an eerily similar plea. In his notorious “Chicken Kiev” speech, the American leader urged Ukrainians to turn their backs on independence and reject “suicidal nationalism”. Much like his WWI era predecessors, Bush was so preoccupied with Russian stability that the aspirations of over fifty million Ukrainians barely registered. Even after the breakup of the USSR, this tendency to underestimate Ukraine’s geopolitical importance has remained a feature of Western policymaking. There was no roadmap towards future EU or NATO mem-
bership for the country following the 2004 Orange Revolution. On the contrary, many EU politicians spent the next few years debating whether Ukraine was actually European at all. This pattern has continued since 2014, with the welcome but comparatively modest aid efforts of the international community reflecting a prevailing mood of caution that is completely at odds with the severity of the situation. Given this underwhelming Western response, it is easy to forgive Ukrainians for pointing enviously to the largesse their Central European neighbors have enjoyed for the past quarter of a century. In contrast, Ukraine’s treatment has often been akin to that of an uninvited dinner guest who arrives late and upsets the seating plan. This tendency to view Ukraine as an awkward afterthought has persisted despite the shock of Russia’s military intervention. The country has spent four-and-a-half years fighting for its life and yet the door to the most exclusive clubs in the Western world remains more firmly closed than ever. Indeed, Kremlin conspiracy theories alleging a grand plot to separate Ukraine from Russia must first contend with the almost complete absence of evidence that the West actually wanted Ukraine to join in the first place. In reality, any integration impetus has come almost exclusively from the Ukrainian people themselves. The absence of a clear Western vision for Ukraine is partly rooted in unfamiliarity. Despite over twenty-five years of independence and two prodemocracy revolutions, many in the international community continue to view the country through the prism of outdated Russian narratives that portray Ukraine as a rebellious province and treat Ukrainian statehood as an historical aberration. The country’s pluralistic past of Polish, Habsburg and Ottoman influences becomes a dull Kremlin monotone, while Stalin’s genocidal campaign against the Ukrainian nation is lost amid euphemistic talk of collectivization. Unsurprisingly, this encourages the misleading conclusion that Ukraine itself is a recent invention. Russia’s motives for promoting such notions are self-evident. Ukraine’s integration into the Euro-Atlantic community would not only represent an unprecedented imperial retreat; it would also create a template for democratic transition that could quickly pose an existential threat to Putin’s authoritarian model. This explains why the Kremlin resorted to force in 2014 and underlines Ukraine’s central role in the confrontation with Russia. Some Western leaders understand this perfectly well, but without a broader consensus on the need to embrace Ukraine’s integration ambitions, the country looks destined to remain a source of international instability. The current Cold War began in Ukraine, and it will continue to escalate as long as the country’s geopolitical fate remains in doubt.
About the author: Peter Dickinson is the publisher of Business Ukraine magazine and a nonresident fellow at the Atlantic Council
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poland in ukraine
Poland in Ukraine Interview: Polish Ambassador to Ukraine Jan Pieklo says the historic growth of the Ukrainian community in Poland since 2014 is strengthening ties between the two nations
About the interviewee: Jan Pieklo is the Polish Ambassador to Ukraine What impact does the growth of the Ukrainian community in Poland have on the Polish economy? The unprecedented inflow of Ukrainian migrants to Poland is a win-win situation for both our countries. Poland has enjoyed more than two decades of uninterrupted economic development and recently has become the first country from the former communist bloc to receive recognition as a developed market economy. This fast economic growth makes Polish companies and entrepreneurs open to foreign workers. Ukrainian migrants are the largest group amongst them, and that is why we can say they have their part in this success. One cannot also omit the fact that Poland and Ukraine are close not only geographically but also in the cultural sense. It makes cities such as Warsaw, Wroclaw, Gdansk or Cracow very comfortable places for Ukrainian migrants to live. At the same time, it is not only the Polish economy benefiting. Labor migration to Poland helps Ukrainian society overcome the effects of the economic crisis caused by Russian aggression. During this difficult time, easy access to the Polish labor market has allowed many Ukrainians to provide for their families. Given the scale of remittances from Ukrainian labor migrants in Poland, this phenomenon has also had a positive impact on the Ukrainian economy. According 10
to the National Bank of Ukraine, last year alone private transfers from Poland to Ukraine amounted to USD 3.1 billion, which is 20% more than transfers from all other EU countries combined and three times more than transfers from the Russian Federation. To put this into context, Ukrainian migrants in Poland last year sent home more money than Ukraine spends on its defense budget, or over two times the Kyiv municipal budget.
How is the growing Ukrainian community in Poland shaping attitudes within Polish society towards Ukraine? According to various sources, between one and one and a half million citizens of Ukraine currently live and work in Poland. This number has definitely increased dramatically over the last four years. The substantial Ukrainian community managed to fit into Polish society with ease. Ukrainian children attend school together with their Polish peers, and their parents have taken up jobs in many different sectors of the economy. This situation has led to substantial growth in the number of interpersonal ties, making the social bonds between the two countries stronger. An increasing number of Poles are now gaining firsthand knowledge of their Ukrainian :
poland in ukraine
: neighbors. Undoubtedly, this situation is having a positive impact on overall
perceptions of Ukraine in Poland. Ukraine is now regarded as the source of reliable, well-educated and efficient colleagues, while Ukrainians are seen as people who feel familiar to us both culturally and mentally. It is upon this foundation that we will build further relations between Warsaw and Kyiv. As Polish knowledge about Ukraine increases, so does their curiosity. This is evident in the significant recent rise in the numbers of Polish tourists visiting Ukraine
How is the massive influx of Ukrainian workers changing the face of the towns and cities of today’s Poland? In some large Polish cities including Warsaw, Wroclaw and Poznan, Ukrainians constitute up to 10% of the population. In some these of these municipalities, local authorities even decided to appoint special representatives responsible for cooperation with the Ukrainian community. Such a large number of inhabitants from Ukraine has a positive influence on the social fabric of these cities. For instance, we see a growing number of Ukrainian organizations, many of which play an active part in cultural and social events at the local level. Furthermore, restaurants offering Ukrainian food become more and more popular throughout the country. Another aspect of the influence Ukrainians have in Poland is evident on the Polish real estate market. Those citizens of Ukraine who chose to stay in Poland for longer often decide to become homeowners in our country and purchase property. What role does memory politics play in today’s Polish-Ukrainian relations and how would you like to see attitudes towards the two countries’ shared history evolving in the coming years? Poland and Ukraine are close neighbors, and thus there are issues that need solution based on truth and mutual understanding. It is very hard for Poles to understand the glorification of UPA, an organization responsible for the Wolyn massacre. Moreover, we do believe that the ban on exhumation works in Ukraine should soon be lifted. We cannot agree with the fact that in Ukraine there are unmarked mass graves where the bodies of Poles lie without proper commemoration. This issue is of crucial importance because as the years pass by, it is going to be more difficult to identify these graves. Nevertheless, we will not allow the memory of the victims to fade away. Having said that, I need to underline that dialogue on this particular subject will not overshadow equally important issues such as the growing threat coming from the east or our fastgrowing economic cooperation.
Ukrainian security services have accused Moscow of seeking to engineer animosity between Ukraine and Poland and have identified the Kremlin as being behind a number of specific plots. What steps can prevent provocations from escalating into a vicious circle of deteriorating relations? Events in the last couple of years have taught us that Russia has a significant number of tools to wage hybrid war. One of those tools could be special services undermining stability and security in other countries. Unfortunately, one can only guess at which incidents are inspired or orchestrated by Russia. I do believe that in order to prevent Russia from interfering in our relations, we need to foster our cooperation. To be precise, in March 2017 the Polish Consulate General in Lutsk (western Ukraine) was attacked with a grenade launcher. We still do not know the identity of the perpetrators despite the fact the Ukrainian authorities have suggested from the very beginning that Russian special services were responsible for the attack. I would like to underline that Poland stands ready to support the relevant Ukrainian authorities in conducting the investigation into this attack. 12
Where do you see the greatest opportunities for further expansion of bilateral economic ties between Poland and Ukraine? I see considerable hidden potential for cooperation in the IT sector. Both our countries have international reputations for their highly qualified IT workforces and vibrant startup scenes, which creates favorable conditions for launching joint projects. Why is it so crucial to cooperate? As we know, many successful startups are from the very beginning multinational projects because this approach helps to operate on the international market and boosts creativity among the team. With this in mind, I think building up the potential for Polish-Ukrainian startups may be mutually beneficial. Such projects could effectively compete on the global market. Furthermore, Poland has a developed venture capital market that is ready to invest in promising startups from Ukraine, as was already successfully done in the case of the educational startup Preply. Innovative startups may bring significant additional value to the Polish and Ukrainian economies. They also help create well-paid jobs, which are definitely welcome in both countries. Poland has recently become the first former Eastern Bloc nation to gain official recognition internationally as a “developed market”. As it continues its own post-Soviet transition and seeks to reinvent itself internationally, what inspiration can Ukraine take from Poland’s achievement? I believe our experiences in this field may be very useful to Ukraine as our countries share many similarities. The crucial lesson from our economic growth in recent years is the role of socially sustainable development. We have learnt that it is possible to build a high performance economy without it being at the expense of society. I think that given Ukraine’s problems with social inequality, the country needs an economic growth model that is able to address this issue. Our experience shows that successful transition does not mean accepting “savage capitalism”. However, we must also recognize that today’s Ukraine remains under the intense pressure of wartime conditions, making it hard to concentrate on socially responsible development strategies.
Polish leaders have historically viewed a strong Ukraine as an essential element of Poland’s own security. What role does support for Ukraine play in today’s Polish security doctrine and how do you see security cooperation between Ukraine and Poland developing in the next few years? Indeed, Poland for many years has indicated that a sovereign Ukraine, with a stable market economy and blooming civil society, is one of the key factors for Polish security. That is why, in this time of Russian aggression against Ukraine, we use all the tools at our disposal to support Kyiv. Polish diplomats continue to keep the Ukrainian issue high on the international agenda, both bilaterally and multilaterally. In this regard, it is important to underline that Poland, as a nonpermanent member of the United Nations Security Council, decided to make the territorial integrity of Ukraine its top priority. The Polish Foreign Minister Jacek Czaputowicz made this very clear during the UN Security Council session last May, as did President Andrzej Duda during the 73th meeting of UN General Assembly in September. Bilaterally, we continue to cooperate with our Ukrainian partners to strengthen the security of both countries. In December 2016, we decided to sign an agreement laying new foundations for military cooperation. Furthermore, Poland and Ukraine (together with Lithuania) cooperate in the framework of the LITPOLUKRBRIG brigade, which is constantly in training and is now fully operational. Additionally, our military services conduct training operations with their Ukrainian colleagues. I believe that the future of Polish-Ukrainian military cooperation carries great potential but we need to find practical solutions for the ideas forged during high-level meetings.
Ukrainians choosing Poland Higher salaries, a better business climate and attractive future prospects have helped drive the rapid rise of Poland’s Ukrainian community since 2014 Until 2015, Ukrainian Ivan Melnyk had only been abroad once. He was working in Kyiv as an IT specialist when he has received an invitation from Polish HR specialists. “I didn’t hesitate long. I accepted their proposal to start everything from scratch. Wroclaw? All right, let it be Wroclaw. Even if I had no friends there and could only count to ten in Polish,” he recalls. Today Ivan works in the IT department of a bank. He has bought his own apartment and in the near future plans to get married. “During my first year in Poland, everything was hard to get used to, especially the food. The Poles are so proud of their herring but I cannot even look at it! Now everything has changed. Thanks to working with Poles, I have learned the language and can say that now I have both Polish and Ukrainian friends.” Melnyk is representative of the current generation of Ukrainian migrants in Poland. The typical portrait is of a man over 30 years of age from a big or medium-sized city with a specialized education who has never previously worked abroad. 14
The growth of Poland’s Ukrainian community has made headlines since 2014, but Ukrainians actually first began arriving in Poland for employment purposes in the 1990s. Initially, many took up work in the retail and service sectors. These early migrants were often women looking to earn enough to cover specific expenses like home repairs or their child’s education. Those with longer-term plans tended to look further afield to countries like Italy and Portugal. In the 2000s, the number of Ukrainians seeking jobs in Poland began to rise, with students, factory and agricultural workers added to the mix. Nevertheless, relatively few saw Poland as a first choice destination for emigration purposes. The situation changed drastically in 2014, when the Russian annexation of Crimea and the outbreak of war in eastern Ukraine led to a sharp deterioration in the Ukrainian economy. Earning power had long been greater in Poland, but plummeting Ukrainian wages in 2014-15 meant that the gap widened dramatically and salaries in Poland
became four or five times higher. In addition to attractive salaries, Poland also appealed to Ukrainians thanks to liberal migration legislation and cultural proximity. This convinced hundreds of thousands of Ukrainians to try their luck on the Polish job market. Today, both the Ukrainian language and Polish being spoken with a characteristically Ukrainian accent are common features of everyday life not only in Lublin or Warsaw, but also in Wroclaw, Poznan and Szczecin. In the past few years, Ukrainians have become a highly visible community in Poland. Although reports of two to three million Ukrainian immigrants are an exaggeration, we can talk with a degree of certainty about at least several hundred thousand Ukrainians in Poland. In the first half of 2018 alone, Poland issued 110,000 work permits. Meanwhile, according to statistics from September 2018, almost 170,000 Ukrainian citizens hold valid temporary and permanent residence permits. To put this into perspective, in 2013 the figure was around 20,000. In addition to these new temporary
poland in ukraine
The “I am an Ukrainka” poster campaign is part of the current “Neighbors” art festival organized by the Warsaw Museum of Modern Art and Museum of Warsaw. It aims to spark public debate over the role of Ukrainians in today’s Poland (Poster: Davyd Chichkan/Curator: Oksana Briukhovetska/Photography: Wojtek Radwanski)
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: and permanent residents, nearly one mil-
lion Ukrainians have come to Poland for seasonal work. For Ukrainians, higher salaries are not the only attractive feature about working in Poland. It also allows them to rapidly learn the Polish language, travel to other EU countries, and gain access to good schools or universities for their children. While the majority of Ukrainians still work in the transport, construction, agriculture and service sectors, the number of white-collar workers and professionals is also growing rapidly. Ukrainians are investing in Polish real estate and have moved ahead of Germans and Brits in terms of the number of apartments bought in Poland. Wroclaw Stadium was one of the symbols of Euro 2012 European football championship co-hosted by Poland and Ukraine. The city has since dedicated part of stadium complex to public educational initiatives, and Ukrainian Mykhailo Vivsyaniy from Vinnytsia region makes decorative floral designs here as co-owner of the company Green Polis. “I wanted to live abroad since childhood,” he says. “I thought about Germany, but when I calculated how much it would cost, I chose to study in Poland instead. After living in Bydgoszcz, I moved to Wroclaw. In my opinion, it is the best city in the world. Whenever I go home to Ukraine it also feels good, but when I come back to Wroclaw I understand that this is already my place.” In recent years, Wroclaw has become a focus of the Ukrainian community in Poland. According to the latest estimates, Ukrainians make up around 7-8% of the city’s inhabitants. Andriy Markovskiy from Zhytomyr came here to study. After completing his education, he worked at a factory and a greenhouse before finally deciding to start his own cleaning business. For over a year now, his staff have provided cleaning services to corporations and local government institutions. “I knew nothing about this industry before. I read books, attended forums, invested in marketing, but when it came to running a business, it was different altogether. Today everything works and I already have new ideas. In Ukraine this would not have been possible because there is too much corruption,” he says. Andriy is not alone. Moving to Poland has become particularly appealing for Ukrainians who always wanted to own their own business but were afraid of complex regu-
lations. About 3,000 Ukrainians have now registered firms in Poland, mainly in trade, services and the food industry. With 40kg of coffee beans, 4,000 visitors a month and a floor space of just six square meters, Dobro&Dobro cafe is another example of entrepreneurial Ukrainians setting up their own businesses in Poland. Dubbed “the smallest cafe in Poland”, it is the brainchild of founders Oleg and Inna Yaroviy, who began to plan their own business immediately upon arrival in Poland in 2015. Most of all, they wanted to create something that would allow them to communicate with people. This was the thinking behind their tiny cafe in Warsaw. “Customers joke that we are more like an ATM than a cafe, but it is our small size that secured a place in the Polish Book of Records,” says Oleg. His wife Inna adds that the migrant experience has helped them spread their wings. “We feel the ties between our two countries, Poland and Ukraine. Our goal now is to build a network of the smallest cafes across Europe. When you are a migrant, you come to understand that borders are only a state of mind.” A desire to associate themselves simultaneously with two countries is typical of the current generation of Ukrainian migrants in Poland. When Warsaw started treating the wounded from Maidan in early 2014, Victoria Batryn, who moved to Poland from Ternopil in 2000, became a volunteer at the hospital. Together with Polish volunteers, she then decided to organize a charity concert to help the children of fathers wounded or killed in Kyiv. “It was vital to find the right name, so the “For the Heroes of Maidan Initiative” was born. The support we received from Polish society has been amazing! As well as concerts, we now also organize summer camps for children of the victims of Maidan and the Donbas war. Interest in Ukraine has dropped, but the most persistent and loyal partners still remain with us.” While thousands of Ukrainians are flourishing in Poland, do they feel at home? Victoria says that even after nearly two decades in Poland, she still misses Ukraine. “In the future I would like to return to Ukraine,” she says. “I want to use the experience I have gained abroad. But for the time being, I feel I can do more for my country by staying in Poland.” Mykhaylo Vivsyaniy sees himself as settled and says coming to Poland at a young age made a difference. “It is probably
difficult for older people to lay down roots but I am happy with everything. Life can change in different ways, but 10 years from now I see myself still living in Poland.” According to a poll conducted by EWL Group, 22% of Ukrainians who currently work in Poland would like to reside in the country permanently. On the other hand, many Polish businesses are concerned that 59% of Ukrainians would prefer to move to Germany if Berlin opens its labor market. This workforce competition is making the issue of integrating the Ukrainian community more acute for Poland. “The best way to integrate is through working together,” says Pawel Kulaga, head of the Migration Program of the Polish-Ukrainian Chamber Commerce. “Working alongside Poles, Ukrainians often find Polish friends. Meanwhile, Poles appreciate and respect people who work diligently. These ties could be mutually beneficial. Perhaps they will also encourage Poles to visit Ukraine and get to know their neighbors better.” Recent studies appear to confirm Kulaga’s words. According to a poll conducted by Personnel Service, 85% of Polish employees have a positive or neutral attitude towards their Ukrainian colleagues. They are also becoming familiar with the Ukrainian language. As Poles get used to living alongside Ukrainians, more and more adverts and public announcements are appearing in Ukrainian. Everywhere from offices to cafes, you will now find Ukrainian alongside the more traditional English and German. This is one more indication of how Poland’s Ukrainian community has risen in prominence since 2014.
Author: Olena Babakova (article commissioned by the Polish-Ukrainian Chamber of Commerce)
PHOTO BY STUDIO BANK
Mission and passion All-around service, personal approach and helping their clients to avoid any problems along the way – those are the main objectives of the companies that help jobseekers and potential employers in rapidly developing the PolishUkrainian job market.
For the past few years, Poland and Ukraine have been strongly connected by the job market. Polish employers are keen to hire our Eastern neighbours, who easily adapt to the Polish market. This is why the role of external recruitment companies is so important: they create a reliable bridge between the employers and employees. One of them is the Polish recruitment company Prosupport. We spoke to the CEO Marcin Molik and Executive Director Karolina Czopor to learn more about the Polish-Ukrainian job market. The Polish-Ukrainian job market is constantly growing. In what direction? M: Last year we saw almost 2 million work permits issued for Ukrainian jobseekers in Poland. Research shows that 30% of 250+ companies that don’t yet have Ukrainian employees want to change it. This proves the market is constantly expanding. That’s why we’re setting up new offices in Ukraine: we recruit more and more employees, both permanent and temporary, and help them find jobs in Poland and elsewhere. Eastern workforce is welcome and needed in many companies. We are contacted by employers from various areas, from production and logistics to construction, hospitality, and specialised companies. K: We help thousands of people who seek employment in our market. I believe a job should be tailored to the employee, not the other way around. That’s why I value pas-
MARCIN MOLIK is the CEO and the founder of Prosupport. Thanks to his experience in people management, he was able to create a new quality of services in the job market.
sionate employees and hope we can share our passion with other people. It might sound a little effusive but with every project and every relationship we establish to connect employers and employees, at the very core lies the same idea: we want to change people’s lives for the better. And we know every job seeker is hoping for that outcome. For Eastern Employees, moving to Poland means a lot of difficulties. How can it be made easier? K: Eastern employees expect companies like ours to help them avoid a lot of difficulties along the way and also help them adapt to the new market in Poland. That’s why we’re focused on supporting them every step on the way. It really helps to learn their needs and skills, so we can point them in the best direction. This requires individual approach – which is one of our main strengths. We complete recruitment process successfully in over 90% of all our projects. M: We don’t just look for companies hiring Eastern workforce. We also want to know what those companies have to offer to new employees. It’s so important those people receive more than just a job. They need accommodation, insurance, social benefits. How do you help companies find employees? M: We provide more than just the right people. Our major objective is to ensure
KAROLINA CZOPOR is the co-founder of Prosupport. By using her creativity with broad experience in marketing and communications, she is always ready to launch new projects.
the continuity of employment. It helps companies work more efficiently but also guarantees long-term savings. We represent the companies we help in the job market, and help them find employees in three workforce groups: permanent, temporary and flexible. K: Many companies are concerned about HR. This is why our experts take care of personnel resources, health and safety training, contract handling and monitoring the employees’ working time. You’ve been watching this job market so closely for a long time. Any last thoughts? M: It’s important to keep an eye on both local and global markets. We see the big picture and plan to expand into new market in Germany. We’re also working on a new project that will modernise our work and make use of years of experience in a new e-recruitment market. K: Employers want the best employees and the best services. Employees want to grow their own careers and achieve new goals. We make sure the change of job – and the change of country – is more than a financial necessity. We give people a chance for professional mobility and progress. We give job seekers from poorer parts of Europe an equal chance of finding a new job matching their qualifications and ambitions.
poland in ukraine
Ukraine and Poland: Potential Startup Superpower
Ukrainian and Polish tech scenes could team up to create a globally competitive innovation hub
The Polish-Ukrainian High-Tech Hub (Kyiv Tech Hub) 2017 aimed to boost bilateral innovation financing cooperation. Project initiator Bartosz Musialowicz (Head of the former Trade and Investment Promotion Section of the Embassy of the Republic of Poland in Kyiv, currently Director of the Polish Institute in Kyiv) is pictured delivering his welcome speech. (Photo: Polish Institute in Kyiv) If you imagine the Ukrainian and Polish innovation markets as a single talent pool, these two countries have the combined potential to become the dominant force in Central and Eastern Europe. This makes sense in a world where size matters. The United States of America and the European Union are both compelling brands for this very reason. It is all too easy for journalists, bloggers and opinion leaders in places like Ukraine and Poland to image their countries as relatively minor outposts of the global innovation market. However, the collective strengths of Poland and Ukraine create a far more compelling picture. Today’s Polish and Ukrainian markets are highly software-oriented. Many small and medium-sized ventures are service providers that incrementally adjust innovative systems to create cheaper and locally competitive products. However, the experience of startups like Looksery in Ukraine and Ivona Software in Poland illustrates how global premier league buyouts can offer company founders and early investors extremely encouraging returns on their initial investment. Examples like CD Project Red in Poland and GitLab in Ukraine also prove that investors are willing to demonstrate a considerable degree of trust in Polish and Ukrainian engineers. This trust is growing and encouraging international players to contribute to the region’s growth by locating R&D and service centers in both Ukraine and Poland. Polish and Ukrainian engineers consistently rank among the world’s best coders and combine this prowess with relatively competitive salary expectations. The goal now is to build on each country’s respective strengths. I would like to encourage my Ukrainian colleagues to seek inspiration from the startup support ecosystem that has evolved in neighboring Poland. They themselves are also a source of inspiration. Contemporary startup entrepreneurs are the heroes of the Digital Age and the modern-day equivalent of the seafaring explorers who shaped the world in the Age of Discovery. The great adventurers of five centuries ago chased the dream of Eldorado. We can create our own gold rush by working together and building on existing synergies. The simplest way for future Polish and Ukrainian partners to engage within the startup industry is by attending tech summits, conferences and other startup community events. These events are typically very welcoming towards startups because they are the bait that attracts potential investors and corporate 18
customers looking to fish for reasonable investment targets. Both Poland and Ukraine have an abundance of such events, with something taking place in Warsaw, Kyiv, Krakow, Lviv, Poznan or Odesa on a virtually weekly basis. Specific examples include the Wolves Summit, Black Sea Summit, Kyiv Tech Hub, InfoShare, Unit Investment Summit and Lviv IT Arena. These events represent the perfect opportunity for new startups to initiate first contacts. There are an number of organizations that can offer guidance to startup scene newcomers while providing access to the kind of institutional support that can open doors to funding. Startup Hub Poland Foundation specializes in serving as an all-in-one interface for startups to investors, grants, co-working spaces, lawyers, journalists and business partners. Numerous routes to funding exist in Poland that are open to Ukrainian startup teams. Initiatives like the Poland Prize program, launched recently by the Polish Agency for Entrepreneurial Development, can also be instrumental in helping ambitious new startups find their feet. The Poland Prize is one of the leading CEE programs for foreign inventors. The cash subsidies it provides of up to EUR 50,000 are unlikely to be sufficient to take a startup to the stage of fully developed project, but it should allow prudent entrepreneurs to enjoy a soft landing period and attract their first Business Angel. Startups can also apply for regional grants in Poland, which are usually proportional to the investment commitment of a Business Angel. Other Polish initiatives such as the Bridge Alfa program offer a combination of public and private funds for startups looking to commercialize new technologies. In addition to these programs and institutional initiatives, Poland also has a growing cluster of venture capital investors ready to provide major funding for projects with a clear roadmap towards commercialization. The good news is that startup culture is the new black. The trend to become your own boss has become so fashionable that even traditional businesses like hairdressers, PR agencies and language schools often call themselves startups, even if they are simply new service providers without any innovative tech elements to their business model. This enthusiasm is particularly prominent in the formerly socialist countries of the old Eastern Bloc, where the tech scene benefits from the momentum of a broader transitional dynamic. In Central and Eastern Europe, Poland and Ukraine should be the first port of call for all ambition startups. Using the money available in Poland solely to finance Polish startups risks wasting an historic opportunity to build a broader platform for innovation in both countries. The best startup teams from Ukraine can work with their Polish colleagues to prove that the idea of a Central European tech Eldorado is not merely a convenient journalistic slogan, but a realistic proposition. Poland has already taken the first steps. Will Ukrainians now follow?
About the author: Maciej Sadowski is the co-founder and CEO of Startup Hub Poland Foundation (Photo: Lukasz Dziewic)
20 Years of Plastics-Ukraine This year, Plastics-Ukraine celebrates its 20th anniversary. The company is a leader on the Ukrainian plastics market as an importer and distributor of polymeric materials for advertising, construction, packaging, industry, furniture, interior and exterior design. It is part of Plastics International (Poland, Ukraine, Moldova, Russia, Baltic States). Since its inception in Ukraine in 1998, the company has remained committed to innovative and ethical business practices. For the past two decades, Plastics-Ukraine has actively promoted the principles of transparent business in Ukraine and has provided a model for others looking to succeed in the Ukrainian market while adhering to the highest international standards. In line with this commitment, the company is a member of the Ukrainian Network of Integrity and Compliance (UNIC) established in 2017 by the Ukrainian Business Ombudsman’s Office as a national platform for the promotion of ethical business practices. Plastics-Ukraine dedicated the landmark anniversary of two decades in Ukraine to the company’s many highly valued partners, who by 2018 had come to number more than ten thousand. This commitment to partnership also extends to relationships with the wider Ukrainian community. PlasticsUkraine is a socially engaged company with a broad portfolio of corporate social responsibility activities including support for a range of charities and institutions. This is an essential element of the Plastics-Ukraine philosophy and reflects the belief that any modern business looking to build long-term success must seek to strike a healthy balance between commercial and social commitments. Plastics-Ukraine charitable initiatives include the funding of permanent psychological support programs for children living with cancer and their families, along with support for numerous children’s homes and
children with special needs. The company’s efforts in the cultural sphere include support for the YUNA music award, the Art Arsenal Complex, and the Kyiv Fortress national historical and archeological museum in the Ukrainian capital, as well as participation in activities to restore and maintain monuments of Poland and Ukraine’s shared cultural and historical heritage. Plastics-Ukraine currently has 247 employees and is present in virtually every single region of Ukraine. The company supplies the Ukrainian market with materials from more than 20 countries around the world and had an annual turnover in 2017 amounting to USD 800 million. This success has garnered significant international recognition. In September 2017, Plastics-Ukraine received a “Business Eagle of the Polish World” award as the leading company in the global Polish diaspora.
Record numbers of Ukrainians studying at Polish universities
Ukrainian university students make up over 50% of Poland’s international student population During the 2017-18 academic year, 37,829 Ukrainian students studied at Polish universities, representing over 50% of the country’s international students. This dominance looks set to last. The next largest group, Belarusians, numbers just over 6,000 students. Meanwhile, in third place is India with fewer than 3000 students.
A Good Fit
Internationalization has become a necessity for Polish universities in recent years as the country faces up to significant demographic challenges. Many in academic circles have long identified students from Ukraine as an ideal solution. They are geographically close by, speak a broadly similar language, have a strong academic tradition, and lack access to sufficient quality universities in their home country. Some of these assumptions have required subsequent qualification. Many Ukrainian undergraduates have indeed been able to achieve a conversational knowledge of the Polish language in a short space of time, but this is not always sufficient for the rigorous demands of academic study. Month-long language prep courses before the beginning of the academic year do not necessarily solve the problem, with the onus of the students themselves to demonstrate ambition and tenacity in learning the Polish language and acclimatizing to a new environment away from family and friends. “Looking back, I can say that coming to study in Poland was like jumping in at the deep end,” comments Ukrainian former student Dana, who graduated from Marie Curie-Sklodowska University in Lublin. “At the time, I wasn’t very conscious of the stress I was under. I remember not getting much sleep but I refused to give up because it would have meant disappointment for me and my family if I did not make it.” The experience of Ukrainian graduates like Dana is making life easier for the current generation of Ukrainians arriving to study in Poland. Many Polish universities now have Ukrainian staff employed to help with the recruitment and enlistment process, helping to guarantee a soft landing. 20
Award-winning Ukrainian undergraduate in Poland: Ukrainian Vadym Melnyk won Poland’s Interstudent Award for international students in 2016. After graduating from the University of Information Technology and Management in Rzeszow he set up his own tech firm in Poland. (Photo: Perspektywy Education Foundation)
Acquiring an EU Education For Ukrainian undergraduates, studying in Poland has many obvious advantages. The key attraction is the quality of education, controlled by the Polish Accreditation Committee and supervised directly by the Ministry of Science and Higher Education. This translates into the prestige of a university diploma from a European Union country, which opens doors to further academic opportunities and helps postgraduates obtain scholarships and grants. Additionally, there are a growing number of courses taught in English at Polish universities, meaning even greater international reach. In Lublin alone, there are already over 50 courses in English. “I graduated from IT studies in Ukraine. Nevertheless, I decided to start from the very beginning again in Opole,” says Wladyslaw Newenczanyj, a computer science student from Kyiv. “My reasoning was simple: it is a chance for me to get a better job. I hope
a European university diploma will open the door to my future career.” Studying in Poland gives Ukrainian undergraduates the opportunity to travel further afield within the EU, while at the same time allowing them to stay relatively close to home. The growth of the Ukrainian community in Poland has led to the emergence of numerous bus, rail and air connections, making travel between the two countries convenient and increasingly economical. Nevertheless, studying in Poland requires significant investment. Ukrainians have to pay for tuition, with fees of up to EUR 2000 annually, although many universities offer discounts. Fortunately, Ukrainian students can now work legally in Poland and so are able to support themselves with part-time jobs. Feedback from university staff suggests that Ukrainian students find it easiest to integrate into humanities and social studies courses. There are considerably more difficulties when it comes to scientific disciplines and technical subjects where many Ukrainian undergraduates lack the technical vocabulary to engage during lectures and coursework. This is a challenge as technical subjects offer the most attractive career prospects. The growth of Poland’s Ukrainian student population predates the post-2014 surge in the country’s Ukrainian community and goes back to 2006, when the “Study in Poland” program first recognized Ukraine as a priority country. This program, implemented jointly by the Perspektywy Education Foundation and the Conference of Rectors of Academic Schools in Poland, has clearly produced results. “From the very beginning we have been operating in many directions,” says Waldemar Siwiński, president of the Perspektywy Education Foundation. “We took part in large educational fairs in Kyiv and other Ukrainian cities. We also prepared presentations of Polish universities in smaller regional centers. Representatives of Polish higher education institutes regularly travel to Ukraine to meet potential students. This is only part of our activity. It has been equally important to intensify scientific contacts between universities, exchange lecturers, and establish direct relationships.” :
Infographics courtesy of the Perspektywy Education Foundation
poland in ukraine
poland in ukraine
Survey Findings Recent research conducted by the Institute of Public Affairs together with CEDOS, SFPA and CEU provides the most comprehensive picture of Poland’s Ukrainian student population. Based on interviews with 1,055 Ukrainians studying in Poland, the survey found that the most frequently chosen subjects were journalism, international relations, administration and law. The popularity of these subjects raises questions regarding future employment opportunities, as they are all out of step with the needs of both the Polish and wider European Union labor markets. Areas with particularly attractive job prospects include engineering studies and the field of care for the elderly. Relatively few of those surveyed said their choice of Poland was primarily down to cultural closeness. Half of Ukrainian students consider themselves fluent in Polish. However, a growing contingent who tend to communicate primarily among their fellow Ukrainian students reported having poorer Polish language skills. Around 70% of respondents rated the attitudes of Poles towards them as good or very good, while 80% expressed satisfaction with their studies in Poland. Two-thirds of Ukrainian students have part-time work alongside their studies, despite the fact that parents pay tuition fees in most cases. Geographically speaking, the largest concentrations of Ukrainian students during the 2017/18 academic year were in the Warsaw and Mazovia region (9913 students), Krakow and Lesser Poland (5530), Lublin (4344), Wroclaw and Lower Silesia (3446) and Lodz (3079). In the Lower Silesia and Lodz regions, the number of students from Ukraine increased last year by about 18% and 17% respectively. Meanwhile, Lublin registered a drop of approximately 6%. In the Masovia and Lesser Poland regions, the number of Ukrainian students remained stable.
students from Ukraine. These recruitment efforts include the organization of trips and participation in educational fairs, while the cities themselves try to make it easier for Ukrainian students to acclimatize and settle in. “I decided to come to Poland to study with my boyfriend,” says Natalia Sopizhenko. “We liked Wroclaw very much. This is a city of opportunities, of multiculturalism and development.” In Wroclaw, many of the city’s vending machines and menus in restaurants now come in Ukrainian. The city’s municipal website is also available in the Ukrainian language. This model is becoming increasingly commonplace in today’s Poland. For example, the Lublin website is currently available in three languages: Polish, English and Ukrainian, as is the Lodz online city portal.
Ukrainian students are making their mark academically in Poland and regularly feature in the country’s annual Interstudent Awards. Organized by the Perspektywy Education Foundation, this event aims to identify the top international students in Poland. It seeks to award those who have made the most of their student experience in Poland and places
significant emphasis on social engagement as well as academic excellence. In the eight years of the competition’s history, Ukrainians have featured among the finalists virtually every single year. Ukrainian Vadym Melnyk was among the Interstudent winners in 2016. A former student at the University of Information Technology and Management in Rzeszow, Vadym had subsequently settled in the city and established his own tech company within the framework of the Academic Preincubator at the Aeropolis Podkarpackie Science and Technology Park in 2015. The company has developed dynamically and become a significant local employer. Vadym’s story is typical of the contributions Ukrainian students are making in Poland, both academically and economically. Many in Polish academia initially viewed the recruitment of students from Ukraine was as a countermeasure to rescue the country’s universities from the challenges of population decline. However, the Ukrainian student community has flourished and become an important element of the Polish academic landscape. These Ukrainian students bring a new dynamic to the life of Poland’s universities while also contributing to everyday life in the cities where they live.
Economically Attractive Arrivals
The municipal authorities of many Polish cities have taken note of the economic potential created by the recent influx of Ukrainian students. The contributions made by Ukrainian students are diverse and include everything from tuition fees at universities to money spent on accommodation rental, shopping, recreation and travel. In recognition of this positive impact on the local economy, municipal authorities in Lublin, Wroclaw and Warsaw all actively support universities in the recruitment of 22
About the author: Anna Wdowinska is from the Perspektywy Education Foundation
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Unibep - we have knowledge and experience
Unibep SA is one of the biggest Polish construction companies and the biggest Polish exporter of construction services. Since 2008, the company has been listed on the Warsaw Stock Exchange.
Unibep SA has worked for many years on Eastern European markets. The company owns a building license in Ukraine, Belarus and Russia. The company specializes in general construction as well as industrial and road construction. It is implementing as a general contractor a number of projects for both Polish and foreign investors, meeting the high technical and commercial requirements of its partners. Unibep SA received a license for construction activity in Ukraine in June 2017. It coincided with the official opening of the company’s representative office in Ukraine. It took place at the turn of June and July 2017. “So far we have won the tender for road reconstruction and for the development of a road border crossing point on the Ukrainian-Polish border. We expect to receive further contracts, including a contract for construction of a shopping centre in Kiev with an area of about 100,000. sq. m with financing based on the “export finance” scheme,” says Tomasz Poskrobko, the Export Director of Unibep SA. At present, on the foreign markets Unibep SA employs mainly workers from the country the company operates in. “Workers employed in our organisational entities already possess the local experience, knowledge of the regulations, laws, customs of the market, and above all, the language,” explains Tomasz Poskrobko. “They can navigate the jungle of administrative and legal regulations, which is particularly important in the case of public contracts. This knowledge is a significant advantage in relation to people who have to learn all of this. Besides, they are perfectly educated and motivated people.”
Extensive experience in export
In previous years, Unibep has implemented as a general contractor the construction of such facilities as the Clover City Center in Kaliningrad, the hotel Crowne Plaza in St. Petersburg, the Zeppelin office building in St. Petersburg, and the Hilton Hotel in Vnukovo in Moscow. Within the scope of recent implementations, it is worth mentioning the commissioning of the Victoria Hotel in Minsk, for example. This is a high standard construction built according to the “design, build and equip” scheme. Unibep, as a general contractor, delivered the fully equipped building to the ordering party after 2 years and 11 months of design and construction works. There are currently three major Unibep construction projects in Belarus: a shopping centre in Grodno, a medical and tennis centre in Minsk, and a logistics centre in the town Balbasovo. The Polish company has for many years been perceived in Eastern
European markets as an experienced general contractor which can provide solutions of the highest level. In the scope of general contracting, it offers construction of hotels, office buildings, shopping and sports centres and industrial facilities, using the “export finance” scheme, also in implementation of investments for foreign investors. “We intend to develop export activities,” says Tomasz Poskrobko. “We have the knowledge and experience to build more and more on foreign markets, especially in Eastern Europe.”
Ambitious implementations and development
General contracting abroad is one of the five key businesses run by Unibep SA. The others are: domestic general contracting, production of modular homes, property development activities and infrastructure construction. Unibep SA is a leading construction company in Poland. On the Warsaw market (the largest in Poland), it is a leader in the residential construction segment, where it has already built approximately 20,000 apartments. The company has implemented such prestigious investments as Galeria Północna shopping centre in Warsaw and Mlekovita 3 milk powder factory in Wysokie Mazowieckie (the most modern manufacturing facility of this type in Central and Eastern Europe). In the area of infrastructure the company builds expressways. In Norway it has built over 2,200 apartments in modular technology. The company is still growing and it continues to diversify its activities. In 2017, it obtained revenues of over EUR 380 million and currently employs around 1500 employees.
Representative Office of Unibep Spółka Akcyjna Ukraine, 79035, Lviv, 7 Sichinskogo str., phone: (+48 22) 853 89 54 mobile: (+48) 691 775 897; (+38) 050 322 24 07 fax: (+48 22) 853 11 75 e-mail: email@example.com More on www.unibep.pl
poland in ukraine
Polish aid is helping to build the new Ukraine Poland has focused its international aid efforts on Ukraine with a range of initiatives including support for small businesses close to the conflict zone
Building the new Ukraine, one small business at a time: Yuliia Horiun and Yuliia Cherkasova pictured in their Sloviansk coffee shop in eastern Ukraine supported by UNDP with Polish funding (Photo: UNDP Ukraine) Ukraine has been a priority partner of the Polish Development Aid program since 2005. From then until 2017, Poland’s development aid budget for Ukraine totaled more than PLN 1.6 billion. Following Ukraine’s 2014 Revolution of Dignity, Polish aid to the country has doubled. In recent years, efforts have included a focus on aiding Ukrainians displaced by the conflict in eastern Ukraine or those living in regions close to the fighting. Some of the most eye-catching initiatives to benefit from Polish backing revolve around support for small businesses, thereby helping Ukrainians affected by the conflict to help themselves and rebuild their communities. 26
At present, Poland’s top aid priority in Ukraine is support for the implementation of key reforms. The Polish Ministry of Foreign Affairs, together with partners from the European Commission, Germany, Sweden, Denmark and Estonia, is engaged in the program “Ukraine Local Empowerment, Accountability and Development” (U-LEAD). The aim of this program is to support the implementation of local government reform in Ukraine. Poland has made a financial contribution to the program and delegated an expert who helped to develop the concept of vocational education reform. Poland is active in support of Ukraine’s decentralization reforms, with 50 local authori- :
Poznań International Fair
Your gateway to business in Central and Eastern Europe With 1.1 million visitors from around the world, 100 branches, and nearly 10,000 exhibitors, Poznań has the potential help you conquer new markets in Central and Eastern Europe. For nearly 100 years, Poznań International Fair has been bringing together people from all over the world. Its portfolio includes trade fairs, cultural and sports events as well as congresses and conferences attracting hundreds of managers, directors and CEOs to Poland. Today MTP is also an event agency providing comprehensive marketing, catering and space arrangement services.
MTP No. 1 Międzynarodowe Targi Poznańskie is the only trade fair centre in Poland with a surface area of over 100,000 m2. It is one of the largest global players in the exhibition market according to the Global Association of the Exhibition Industry. MTP is the leader among trade fair organizers in Central and Eastern Europe, attracting visitors from all over the world. All the most important Polish export trade fairs take place at MTP. Examples include Meble Polska Furniture Fair (furniture), Polagra Food (food), Budma (woodwork), Motor Show, TTM (automative) and ITM (metal industry). MTP deals with the organization of trade fairs at MTP fairgrounds and in other locations.
Business support – training, publishing and marketing research MTP also publishes specialized magazines, organizes congresses and training courses, and provides reports and research on Polish and foreign entities. For over 30 years, it has been implementing complex space arrangement projects for market leaders and small system stands available for small businesses. It also provides comprehensive organization of trade fairs for companies from abroad, as well as promotion when entering new markets.
Space for talks and meetings 17 spacious, air-conditioned halls along with conference rooms including the Earth Hall for 2,000 people form a friendly space to conduct business meetings. MTP also offers catering facilities - modern and designer furnished Garden City restaurants. The MTP area is located in the centre of Poznań, the largest Polish exhibition hub, located 300km away from Warsaw and Berlin. The exhibition halls are in the immediate vicinity of the international railway station and bus station, just a few kilometres from the airport offering connections with major Ukrainian cities such as Lviv and Kiev. Guests may also use a car park with space for 2000 cars.
Congresses and conferences – our own and PCC events MTP is the organizer and host of world conferences, congresses and political events. Such events as the FDI World Dental Congress, National Assembly and the United Nations Conference on Climate Change all took place in Poznań and used Międzynarodowe Targi Poznańskie facilities. For a complete calendar of forthcoming events, please visit the MTP website at www.mtp.pl
Ukraine Contact Information: Ekaterina Brovchenko, Head of Department World Expo Co Ltd. 86, Bohdana Khmelnitskogo str., 01054, Kiev, Ukraine tel./fax: +38(044)392-95-94 firstname.lastname@example.org
poland in ukraine
(Left) Nataliia Kravtsova pictured in her handicrafts workshop in Severodonetsk in Luhansk Oblast. The workshop receives support from UNDP with Polish funding (Photo: UNDP Ukraine). (Right) Development of a volunteer medical system in Ukraine: a Maltese Medical Service project financed by Polish Development Aid (Photo: Maltese Medical Service)
: ties participating this year in different initiatives aimed at building
their capacity. Local and central government officials have had the opportunity to participate in Polish-backed training programs organized by the Eastern Partnership Academy of Public Administration focusing on corruption prevention and implementation of the free trade component of Ukraine’s Association Agreement with the EU. Education is also a priority of Polish aid efforts in Ukraine. The “New Ukrainian School” program has seen a joint Polish-Ukrainian team working for the past four years to develop new educational programs for Ukrainian schools, with the Lviv Institute of Postgraduate Pedagogical Education as a partner. In the crisis management sphere, Poland supports volunteer medical services programs alongside the enhancement of volunteer firefighter teams and mountain rescue services. Based on experience gained working with the Union of Volunteer Firefighters in Poland, this year saw the launch of a training program to support the creation of local firefighting units in Ukraine’s Donetsk Oblast. Within the framework of this program, more than 100 volunteers will undergo training and receive personal protection equipment. Poland also supports the mountain rescue unit based at the former White Elephant observatory in the Ukrainian Carpathian Mountains. This backing makes it possible to maintain a permanent mountain rescue presence at the site. In addition to the 36 projects conducted in Ukraine this year by Polish NGOs, Polish governmental institutions, and the Polish Embassy in Kyiv, Poland also participates in a range of international initiatives. One ongoing project focusing on the information sphere is under the management of the International Solidarity Foundation (Poland) together with USAID. It aims to boost the professionalism of the Ukrainian media, particularly in relation to coverage of the Association Agreement between Ukraine and the European Union and the implications of this agreement for the public. Poland is active in efforts to mitigate the consequences of the conflict in the east of the country and participates in the United Nations De-
velopment Program’s “Recovery and Peacebuilding Program” (RPP). This project promotes business skills in the war-stricken regions of Donetsk and Luhansk Oblasts, providing participants with a range of support, training and consultation services. In 2017 and the first half of 2018, 44 Ukrainians received grants from the project, leading to the creation of 150 jobs. In order to encourage residents of regions close to the conflict zone to start their own businesses, the UNDP came together with the Molodiya Social Advertising Festival to produce 16 short films in a series entitled “Big Stories of Small Businesses” profiling the experiences of local businesses that received UNDP grants to start or develop their business in eastern Ukraine. These films premiered in November 2017 and have since appeared throughout Ukraine including on the country’s popular intercity train services. The business climate has further benefitted from a Polish-backed Youth Entrepreneurship Incubator in Lviv established by Krakow’s Institute of Urban Development with the support of the Lviv municipal authorities. Meanwhile, Poland has provided aid for Business Support Centers in seven Ukrainian oblasts that offer everything from personnel training and office refurbishment to help in developing cooperation with local government. Polish humanitarian initiatives to help Ukraine’s population of Internally Displaced Persons (IDPs) include the three-year support project by Caritas Poland to create Caritas Ukraine support centers in seven Ukrainian cities (Kriviy Rih, Kharkiv, Zaporizhia, Kamyanske, Drohobych, Ivano-frankivsk and Kolomiya). Since 2014, Poland has been supporting UN agencies addressing the humanitarian needs of the population living close to the conflict zone in eastern Ukraine. Poland has also contributed to ICRC activities in Ukraine. With the help of the Polish Ministry of Foreign Affairs, Polish NGOs including Caritas Polska and the Polish Centre for International Aid and Polish Humanitarian Action (PAH) have delivered humanitarian aid and financial assistance to internally displaced persons (IDPs) in eastern Ukraine. Thanks to grants from the Polish Ministry of Foreign Affairs, PAH provides humanitarian aid and social protection for IDPs and local communities in Donetsk and Zaporizhia Oblasts, while Caritas Polska runs four Medical and Social Clinics in eastern Ukraine.
About the author: Joanna Jurewicz is a Counsellor at the Polish Embassy in Ukraine
MSPPU: Building bridges between Poland and Ukraine
The International Association of Polish Entrepreneurs in Ukraine (Miedzynarodowe Stowarzyszenie Przedsiebiorcow Polskich na Ukrainie or MSPPU) has been engaged in nonprofit activity bringing together Polish, Ukrainian and international companies for 20 years. The main goal of the Association is to reinforce economic and cultural relations between Poland and Ukraine. Integration and cooperation are extremely important for two neighboring nations that share a common heritage and a common future.
relevant business issues. The experience of members active in Ukraine for many years is priceless for companies looking to start their commercial activity here. MSPPU activities are not limited to business. The Association also supports a number of public initiatives related to Polish heritage and local community issues. These initiatives include:
MSPPU consolidates legal entities representing diverse fields of activity: manufacturing, banking, insurance, legal, logistics, services providers, importers and exporters. Members include well-known companies such as Kredobank, PZU Group, Ideabank, Raben, LOT Polish Airlines, and others. The turnover of member companies exceeds half the total amount of Polish investment in Ukraine.
- Thanks to the Association and local community support, the following Polandrelated street names have appeared in Kyiv: Jana Pawla II, V. Kotarbinskoho, Y. Korchaka, Idzikowski Family
The Association is not only a platform where members support each other. It is also an effective tool for dialogue with Polish and Ukrainian governmental institutions. Through participation in international events, MSPPU seeks to positively influence the investment climate in Ukraine and create a comfortable environment for members. The Association arranges economic missions along with regular training events and workshops on
- Organization of gatherings for children - Reconstruction of Polish historical monuments
- Participation in reconstruction of astronomical observatory on Pip Ivan mountain - Improvement of Kyiv Fortress exhibition dedicated to Polish January 1863 Uprising These initiatives enhance the image of Polish entrepreneurs in Ukraine and help establish neighborly relations between our countries and peoples. Based on the principle â€œWe are stronger together and can achieve more,â€? MSPPU invites all parties interested building friendly and efficient relations between Poland and Ukraine to join the Association.
Author: Piotr Ciarkowski, Head of the International Association of Polish Entrepreneurs in Ukraine
poland in ukraine
Warsaw and Kyiv: Security Partners Poland sees ongoing strategic security support for Ukraine as vital for the international order in NATO exercises. This constitutes a clear signal that the brigade is ready and waiting for future tasks. Intensified cooperation between the Polish and Ukrainian defense industries began immediately after the start of the war in eastern Ukraine. In the first half of 2014, the first Polish companies established ties with Ukraine’s Ukroboronprom. Polish firms such as drone and night vision systems producer WB Electronics have since entered the Ukrainian market. In order to expand this cooperation, the two countries signed a 2016 cooperation agreement. This serves as the basis for further cooperation and gives a strategic impetus to the partnership between Kyiv and Warsaw.
Polish Diplomatic Support
October 2017 ceremony in Lublin to mark the second anniversary of the Lithuanian-Polish-Ukrainian Brigade (Photo: Robert Siemaszko/CO MON) State security is a prerequisite for any country, but it is easy to lose sight of this during prolonged periods of peace when war is something we only encounter in the media. What happens when a country suddenly becomes a victim of hybrid aggression? What should you do when an aggressor deploys disinformation and propaganda on a previously unseen scale? The most reasonable response is to define the nature of the threat and seek allies. This was the situation facing Ukraine in 2014, and Kyiv did not have far to look for friends. From the very beginning, neighboring Poland has been the strongest supporter of Ukraine as it confronts the Russian threat. At the most precarious moment in its modern history, Ukraine could count on Warsaw.
Keeping the NATO Door Open
Poland pursues an open door policy regarding Ukraine’s aspirations to join the North Atlantic Treaty Organization. Polish officials underlined this position during the 2016 NATO summit in Warsaw, which approved a comprehensive package of assistance for Ukraine. This package includes support for counseling, reforming the security and defense sector, education and training, de-mining and combating improvised explosive devices, and disposal of obsolete weapons. Warsaw supports these measures with a special focus on logistics, human resources, and financial assistance. Poland also backs Ukrainian President Petro Poroshenko’s goal of achieving NATO standards within the Ukrainian armed forces by 2020. Undoubtedly, this will strengthen NATO’s eastern flank. Until it happens, Poland will be offering Ukraine assistance to improve the security of the country’s borders, especially the border with Russia. The key initiative in support of Ukraine’s NATO accession is the creation of the joint Lithuanian-Polish-Ukrainian LITPOLUKR Brigade. During his last visit to Kyiv, the Chief of the Polish National Security Bureau Pawel Soloch talked with the Secretary of Ukraine’s National Security and Defense Council Oleksandr Turchynov and Defense Minister Stepan Poltorak about the future participation of this unit
Author: Political-Economic Section of the Polish Embassy in Ukraine 30
Since becoming a non-permanent member of the UN Security Council in January 2018, Poland has used its status to stress the need to uphold international law and support Ukraine’s sovereignty. On 29 May 2018, Polish Minister of Foreign Affairs Jacek Czaputowicz chaired a UN Security Council Briefing on Ukraine and reaffirmed Poland’s support for a UN peacekeeping mission covering the whole Donbas region, including the Russia-Ukraine border. Minister Czaputowicz also called for the appointment of a Special Representative for Ukraine. In his view, this would clearly demonstrate the UN’s involvement in the settlement of the Donbas conflict while injecting a new dynamic into the peace process. The Minister also noted that the Russian-Ukrainian conflict represents a key challenge to the concept of a world order based on shared respect for international law. Russia’s aggressive behavior towards a sovereign country, as well as the illegal annexation of Crimea, are vivid examples of disregard for the basic principles of international law. At the UN General Assembly, Polish President Andrzej Duda drew the attention of world leaders to the reform of the UN Security Council in order to expand the “field of equal rights and competences of all Council members”. Kyiv is also seeking changes to the UNSC. In his speech to the UN Security Council, President Duda emphasized the obligation of all countries to comply with non-proliferation and arms control arrangements. “In the last few years, we have witnessed the clear breach of the Budapest Memorandum that guaranteed the territorial integrity of Ukraine in exchange for its peaceful and voluntary denuclearization,” he stated. ‘Equally alarming is the deployment of dual capable means of delivery close to our borders. These actions have significantly contributed to the deterioration of the security environment.” There can be no doubt that Poland and Ukraine are strategic partners and friends. Warsaw remains one of Kyiv’s most reliable security allies. We want to believe that our Ukrainian friends also see it this way. Warsaw’s perspective is very clear: the Western world needs to continue (and in some cases reinforce) its endeavors to help restore the territorial integrity of Ukraine. Our message is simple: the war waged against Ukraine is not only a threat to Kyiv’s sovereignty. It is the first full-scale act of aggression by one European country against another since WWII. There is a risk the ongoing conflict could affect the stability of the entire Eurasian landmass. This could jeopardize the international order established after the Soviet collapse.
Polish counter-drone technology is introduced in Ukraine The Polish company behind a unique counter-drone system has begun to invest in Ukraine. It hopes to cooperate with the government, business partners and universities, including on the establishment of a C-UAV testing centre. Advanced Protection Systems (APS, www.apsystems.tech) is one of the global leaders of airspace technology and cybersecurity. APS commercialises, on a global scale, its own highly effective system for the detection and neutralisation of drones: CTRL+SKY. This system is based entirely on proprietary solutions allowing full customisation of the system to each customer’s specific needs. The mobile version of the system is currently used by the uniformed services in the Czech Republic, stadium operators (e.g. the managers of the City Stadium in Gdynia), as well as private customers. Now APS wants to introduce its CTRL+SKY system to the Ukrainian market, also in order to liaise with local universities, businesses and engineering talents. “For us, Ukraine is a strategic market not only as a target for the sales of our system. We also see huge knowledge and business potential for the development of our technologies,” says Maciej Klemm, PhD, APS CEO. The CTRL+SKY system, protected by several patent applications, has already been recognised internationally by numerous awards. The goal is clear: APS wants to cooperate with the public-private ecosystem of Ukraine in order to offer an efficient system that is far beyond the reach of the competition. “Our plan for the upcoming months is to establish a C-UAV testing centre in Ukraine as a platform for closer cooperation between our company and Ukrainian partners,” emphasizes Maciej Klemm. APS has already taken some decisive steps in this direction: on 18 September 2018, the company demonstrated the Ctrl+Sky system during a dedicated workshop at the Antonov Airport in Hostomel. The event was attended by more than 40 representatives of civil and military agencies responsible for providing protection against drone attacks.
Advanced Protection Systems SA Plac Kaszubski 8, lok. 311 81-350 Gdynia phone: +48 882 812 210 email: email@example.com website: www.apsystems.tech
How Poland regained independence in 1918
This year Poland marks 100 years since emerged from WWI as an independent nation
Allegory of the resurrection of Poland with the help of Entente countries (Author: Bogdan Nowakowski. From the collection of Piotr Szlanta) At the outbreak of World War I in summer 1914, Poland did not exist on the political maps of Europe. The Polish state had been subject to partition in the eighteenth century by its neighbors Russia, Prussia and Austria. During the nineteenth century, the Poles had organized a number of national uprisings but they were not successful. Fresh prospects for independence emerged at the beginning of the twentieth century with the rise of antagonism between Russia on one side and Germany alongside the Habsburg Empire on the other. These rival powers all tried to gain the support of the Poles. This was understandable. Much of the fighting during WWI took place in lands inhabited by Poles, while millions of Poles served in the armies of Russia, Germany and Austria-Hungary. WWI was in many ways a fratricidal conflict for Poles (as it was for Ukrainians), with thousands fighting for opposing armies. This led to difficult choices. Part of Polish society decided to cooperate with Austria-Hungary and Germany in the war against Russia, with the volunteer Polish legions of 1914-1917 supporting this side of the conflict. The leader of the legions was Jozef Pilsudski, a socialist advocate of independence. At their peak, the legions consisted of 25,000 soldiers. During the same period, Ukrainians were forming the Sich Riflemen units that would go on to fight for Ukraine’s independence. The Polish Legions distinguished themselves on the frontlines of WWI and gained considerable recognition. As the reputation of his forces grew, Pilsudski demanded clear declarations from Germany and Austria-Hungary regarding the future of Poland. He wanted to see the proclamation of a new Polish state and the formation of an independent Polish government that would have command of a national army. 32
In summer 1915, Germans and Austro-Hungarians successfully occupied Polish territories previously held by Russia and vast regions on the eastern bank of the Bug River with a large Polish population. On 5 November 1916, the Emperor of Austria-Hungary Franz Joseph I and his German counterpart Wilhelm II proclaimed the so-called Act of two Emperors. By the terms of this act, they declared that they would create a Polish state on newly gained Russian territories. However, they did not confirm any specific borders for this state, nor did they establish a monarch. Nevertheless, some initial forms of Polish state authority started to take shape in the occupied territories. For example, a Regency Council emerged. However, until October 1918, real power belonged to the occupying forces of Germany and Austria-Hungary. The two emperors thought that by their declaration they would gain a new Polish million-man army ready to fight against the Russians. They were soon disappointed because the Poles were reluctant to fight under their flags and remained doubtful about the true intentions of Vienna and Berlin. After the revolution in Russia in March 1917, the context of the Polish issue changed as well. Pilsudski understood that after the fall of one of the Poland’s occupiers, he should now seek to break cooperation with the other two. Poland’s goal became the defeat of Germany and Austria-Hungary and the victory of France, Great Britain and the US. This is why Pilsudski dismantled the Polish legions in the summer of 1917. This led directly to his arrest and imprisonment in Magdeburg. Meanwhile, Polish politician Roman Dmowski was an advocate of cooperation with Russia and its Western allies. He thought that after victory, Russia
and Canada along with Polish POWs from the German and Austro-Hungarian armies. In the final stages of WWI, units from this army took part in battles with Germans on the Western Front. At the same time, Polish units were emerging in Russia. The Polish Army in France had a maximum of 70,000 soldiers at its peak. In 1917, the Polish National Committee began work in Paris. It was the most important Polish representation on the Entente side and began working in the diplomatic arena to regain independence for Poland. The Polish Army in France became politically subordinate to the Committee. The Western powers regarded the Committee as the main force fighting for the independence
of Poland and saw it as a kind of informal government in exile. Meanwhile, the United States clearly supported the idea of Polish independence. In his speech to Congress on 8 January 1918, US President Woodrow Wilson presented his program for world peace. He put forward his vision for a new post-war world order based on the principle of self-determination of peoples. The thirteenth of Wilson’s famous fourteen points called for the establishment of an independent and united Polish state with free and secure access to the sea. As the final defeat of Germany and Austria-Hungary drew closer in late 1918, the transition of power in the Austrian part of Polish territories began, led by the Polish Liquidation Commission in Krakow. On 7 November, a Provisional People’s Government of the Republic of Poland emerged, led by socialist Ignacy Daszynski. The spontaneous disarming of the Germans in their occupation zone in central Poland also began. Many were afraid of anarchy and revolution, so they called on the Germans to release Pilsudski, whose popularity continued to grow. On 10 November, Pilsudski arrived in Warsaw to
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would unite all Polish lands and provide a high degree of autonomy leading to independence in the future. For the first few years of the war, Russia enjoyed the support of the small volunteer Legion of Pulawy. When the tsar was overthrown, the new Russian authorities wanted to meet Polish expectations. In March 1917, the Provisional Government of Russia issued a statement concerning the Polish issue. They admitted that the partitions of Poland had been illegal and permitted the creation of Polish units within the Russian army. The Petrograd Soviet of Workers and Soldiers Deputies, an alternative revolutionary government, went even further and proclaimed that Poles had the right to build their own country. The declaration by the Russian Provisional Government helped to clarify attitudes in France and the UK towards the Polish question. London and Paris had regarded it as an internal Russian problem and shied away from any discussion so as not to provoke their ally. In this context, the Russian declaration was an important step towards international status for the Polish question. In summer 1917, a Polish Volunteer Army started to take shape in France. Recruits were predominantly drawn from Polish migrant communities in the US
ovations. The following day, the Regency Council appointed him commander-in-chief of the Polish army. This is the moment Poland regained its independence and has since become a national holiday. Three days later, the Regency Council handed over civilian control to Pilsudski alongside military command, before dismissing itself. Poland had returned to the political map of Europe.
About the author: Piotr Szlanta is a Polish historian and assistant professor at the Institute of History, University of Warsaw
Bella Trade Ltd. - 15 years of our history on the Ukrainian market! This year Bella-Trade Ltd. is celebrating its anniversary - 15 years of this Polish business on the Ukrainian market. Bella-Trade Ltd. is a trading company and the exclusive distributor of TZMO S.A., a global manufacturer and supplier of hygienic, cosmetic and medical products. Bella-Trade Ltd. supplies its Ukrainian customers with products of the highest quality, thanks to which life becomes simpler, more convenient and safer. 15 years of Bella-Trade Ltd. in Ukraine is not only about sales and wide distribution but also about social responsibility of Polish business in Ukraine. Among many events that we organize at the initiative of TZMO S.A., the International Football League for the Disabled SENI Cup deserves special attention. Held in Ukraine since 2003 for patients of nursing houses with intellectual disabilities, it annually gathers teams from across Ukraine. Winners go to Torun to participate in the championship finals. The tournament has been supported by corporate partners who over the years have become our good friends – PZU, McDonald’s, Morshinska. This year we were very happy to receive support from another Polish business in Ukraine - Plastics-Ukraine Ltd. In 2017, the Seni Cup won the Ukrainian Panacea Social Project of the Year award. We consistently develop our Corporate Social Responsibility activities and focus not only on sports but also on education. The area of long-term care is one of our educational focuses. Together with the national Institute of Gerontology and with the support of Ukraine’s Ministry of Social Policy we have developed a long-term training program for nursing home professionals and those who care for dependent people. By the end of 2018, nearly 2000 people will have received training. We are glad that our activities provide an opportunity to participate in numerous events that we consider important and socially necessary and will continue to promote the corporate values of the parent company TZMO S.A.
Our extensive portfolio includes more than 500 products from such brands as: wide range of products dedicated to people with incontinence female care products complete range of baby care products including diapers, wet wipes, cosmetics, etc. wide range of practical and modern hygienic tissue products for the whole family wide range of medical materials - from simple products (plasters, tapes, bandages) to advance wounds healing dressings cosmetics and hygienic products for face, body and hair care
household chemistry products wide range of professional medical products – implants, advanced wound dressing materials, rehabilitation equipment and ancillary instruments for surgery
We would like to thank our Customers for the trust they have shown us for many years. That motivates us to continue offering goods of the highest quality. www.bunews.com.ua
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Rescuing the White Elephant of the Carpathians Renovation works continue at Polish observatory in the Ukrainian Carpathians abandoned during WWII
When it first began functioning in the late 1930s, the White Elephant Observatory in the Carpathian Mountains was a state-of-the-art facility. Located at an altitude of 2022 meters on the peak of Pip Ivan Mountain in today’s Ukraine (part of Poland during the interwar period), it served as the University of Warsaw’s Polish Astronomical and Meteorological Observatory and was one of the two finest high-altitude observatories in Europe. The White Elephant was destined to enjoy a short career as a European stargazing trailblazer. Officially opened in July 1938, the observatory abruptly closed in September 1939 as German and Soviet troops invaded Poland from either side to mark the start of WWII. Some of the observatory’s astronomical equipment survived the evacuation to Hungary. However, staff had little choice but to abandon the White Elephant itself. It subsequently fell into disrepair. For many decades, the observatory was in a state of ruin. It remained marooned on the mountaintop, looking more like the remnants of an ancient castle than a relatively modern addition to the landscape that had once been dedicated to the study of the celestial sciences. The idea of breathing new life into the White Elephant came in the early 34
years of the twenty-first century and it came jointly from the Center for East European Studies at the University of Warsaw and Ukraine’s Ivano-Frankivsk National University. Since 2011, financing for renovation works has come from the Polish Ministry of Culture and National Heritage and the Polish Ministry of Foreign Affairs. Additional financial support for renovation has been forthcoming in 2018 from the POLONIKA National Institute of Polish Cultural Heritage Abroad. Thanks to grants from the Polish Development Aid Program, part of the building has undergone renovation and is now home to a permanent mountain rescue team run by Ukraine’s State Emergency Service. This team cooperates closely with the Polish Mountain Volunteer Search and Rescue team (GOPR) from the Bieszczady Mountains. The presence of this mountain rescue facility in the White Elephant makes it the highest residential structure in today’s Ukraine. It may not currently serve as a gateway to the stars, but the White Elephant is once more playing an active role in the life of the Ukrainian Carpathian Mountains. Photo: Ukrainian Communication Group commissioned by the Polish Institute in Kyiv. www.bunews.com.ua
2019: Ten Years of the EU Eastern Partnership The Eastern Partnership was created as a programme of strong and close cooperation with the EU Eastern Neighbourhood in the framework of European Neighbourhood Policy in 2009. Poland has actively participated in it from the very beginning, even when it was only a concept. Our strong support for our closest neighbours and engagement in the EaP policy have been adamant through almost ten years of its existence. When we look at the achievements that accomplished so far, it is beyond question that the programme is one of the most successful EU external policies. Three EaP partners (Ukraine, Georgia and Moldova) have signed Association Agreements and currently are in the process of implementation of their provisions. They all enjoy visa free regimes with the EU. Armenia has signed a Comprehensive and Enhanced Partnership Agreement and now awaits its ratification and is an excellent example of following both Western and Eastern paths by also being a member of the Eurasian Economic Union. All partners work intensively on implementing the 20 deliverables for 2020 – which will bring them closer to the EU in variety of sectoral areas. 2019 will mark the tenth anniversary of the Eastern Partnership. On this occasion, various events and campaigns, ranging from cultural with the engagement of youth and experts, to political, will be held all over Europe throughout the whole year. Undoubtedly, there is a need to increase the visibility of the EaP project among member states and reach regular EU citizens with a message about the added value the Eastern Partnership brings. We must explain the East with its complexities, assets and advantages to Western European populations, who in many cases are simply not aware of its importance for the prosperous future and security of Europe. On the other hand, it is essential to show the important role that the EU has been playing in the countries of the Eastern Partnership. In this case let the numbers speak for themselves:
• Loans for Small and Medium-sized Enterprises: €100 million • Digital Package: €50 million • €170 million made available to support better governance • Extending core Trans-European Transport Networks (TEN-T): €150 million contribution • Energy efficiency package: €225 million • Youth and Education Package: €340 million 2019 should also be a year of deep and thorough reflection over the future of the Eastern Partnership for the next decade. Taking into account the ambitions of partner countries, principles of differentiation and inclusiveness, and the atmosphere within member states, the EU needs to hammer out a clear and visionary perspective that will be both attractive and viable. It will not be an easy task, but throughout a year of debates among experts and officials from the EU and EaP, the proper solution should be achieved. Ukraine is an exceptional partner for Poland, for obvious reasons. The Ukrainian choice of a European path is significant. Its achievements in the spheres of economy, public administration reform, civil society and further willingness to make changes are indisputable. Ukrainians have also proved that they were ready to fight for European values and under the EU flag. Ukrainian strong engagement in day-to-day relations with the EU and ideas on improving the integration process have been duly noted. At the same time Ukraine, along with other Eastern Partnership countries, should, especially now on the eve of 2020, focus on further implementation of 20 deliverables – to show sceptics and doubters concrete results. The European Union and Eastern Partnership countries need each other and that is why both sides must work hard on the success of the programme. The year 2019, although without a regular scheduled summit, will be significant for the Eastern Partnership as a time of implementation, celebration and reflection. Author: Eastern Partnership Section, Ministry of Foreign Affairs of the Republic of Poland
Drone video initiative aims to preserve Ukraine and Poland’s shared heritage Documentary project uses aerial recording to offer contemporary audiences a history lesson from above
A camera crew looks on as a drone prepares to explore the fortress city of Kamianets-Podilskiy (Kamieniec Podolski) from above for the “Poland-Ukraine. In the Wake of Historical Heritage” project (www.pluazdrona.eu)
An ambitious new cultural heritage preservation project is attempting to create an aerial archive of the stunning architectural legacy left behind by the era of the Polish-Lithuanian Commonwealth in Ukraine. Using drone video technologies, the project is attempting to document the many castles, fortress and churches that make up the shared historical inheritance of today’s Poland and Ukraine. This joint Polish-Ukrainian initiative aims to provide a new generation with access to information about a long chapter of Central European history often eclipsed by the tumultuous events that were to follow in subsequent centuries. The Polish presence in Ukraine dates back many hundreds of years, creating an enormous list of landmarks and monumental structures that qualify as the common heritage of both countries. Ever since the collapse of the Soviet Union in 1991, interest in the Polish-Lithuanian Commonwealth has been growing, both within the former borders of the once-mighty state and beyond. Ukraine is central to this process and has a vast array of sites that reflect the important role it played in the history of the Commonwealth. The new drone documentary initiative, dubbed “Poland-Ukraine. In the Wake of Historical Heritage”, aims to create a video library of 100 short films that will serve as a window onto Commonwealth heritage located in Ukraine. The Europe-East Integration Association is implementing the project in cooperation with :
“Project organizers hope to generate renewed interest in a period that remains vitally important to the national stories of both Poland and Ukraine” 36
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Pidhirtsi (Podhorce) Castle in Lviv Oblast (Photography: Ukrainian Communication Group for the â€œPoland-Ukraine. In the Wake of Historical Heritageâ€? project) www.bunews.com.ua
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Olesko Castle (top), Pomorzany Palace (bottom right) and Pidhirtsi (Podhorce) Castle Church (bottom left) (Photography: Ukrainian Communication Group for the “Poland-Ukraine. In the Wake of Historical Heritage” project)
: the Polish Institute in Kyiv and the Ukrainian
Communication Group. Meanwhile, Poland’s Ministry of Foreign Affairs is providing financial support. The project has a necessarily broad geographical scope. It will encompass all of the most famous places from the annals of Polish-Ukrainian history such as the fairytale fortress city of Kamianets-Podilskiy, Zbarazh Castle in western Ukraine’s Ternopil Oblast, and Khotyn Fortress in southern Ukraine’s Chernivtsi Oblast near to the modern-day border with Romania. Then there is Olesko Castle close to Lviv, which entered history as the birthplace of Poland’s future King John III Sobieski, a man celebrated in his lifetime as the savior of Europe following his victory over the Ottoman Empire at the 1683 Battle of Vienna. Less well-known landmarks will also feature in the project, including the chateau-like castle at Pidhirtsi in Lviv Oblast, which dates back to the 1630s and was once one of the jewels in the Polish Crown of the Commonwealth. All of these landmarks speak of the sheer scale of the multinational Commonwealth. The proj-
ect’s organizers hope that by documenting this heritage from the air in a visually striking manner, they will be able to raise public awareness and generate renewed interest in a period that remains vitally important to the national stories of both Poland and Ukraine. A secondary objective is to publicize the tragic condition of many of these landmarks. After decades of neglect, much of Ukraine’s Polish-Lithuanian Commonwealth legacy has fallen into a state of advanced disrepair. It is now in danger of being lost forever unless there are fresh efforts to preserve these heritage sites. Since Ukraine gained independence, a large number of objects have been saved and renovated thanks to support from the Polish Ministry of Culture and National Heritage and, starting in 2018, additional financial support from the newly created POLONIKA National Institute of Polish Cultural Heritage Abroad. Nevertheless, the needs in this area remain extensive and urgent. The joint Ukrainian-Polish team working on the drone documentary series includes historians, journalists, non-governmental heritage organiza-
tions and teams of local activists. The films they are producing will be available in three languages (Ukrainian, Polish and English) and will feature commentaries from a joint Ukrainian-Polish team of historians. Each individual video will appear at the project’s website (www.pluazdrona.eu). An official YouTube page will also offer the full archive of drone documentaries, while enthusiasts can keep track of progress via the project’s official Facebook page (@pluazdrona).
About the author: Bartosz Musialowicz is the initiator of the “Poland-Ukraine. In the Wake of Historical Heritage” project and Director of the Polish Institute in Kyiv
Poland and Ukraine vs the Bolsheviks
1920 campaign saved Europe from revolution but failed to win independence for Ukraine
Polish and Ukrainian troops march through central Kyiv on 9 May 1920 to celebrate the liberation of the Ukrainian capital from Bolshevik occupation (Photography: “Dziesięciolecie Polski Odrodzonej”, Kraków-Warszawa 1928) World War I demolished the three empires that had organized the eighteenth century partition of Poland, presenting the Poles with the opportunity to regain independence after 123 years. However, the new state faced the threat of Bolshevik invasion. On 18 November 1918, leading Bolshevik Trotsky proclaimed the start of westward attack that would allow Soviet forces to join the anticipated German revolution. The Bolsheviks proclaimed that their own communist revolution must spread to Western Europe. The shortest route to Berlin and Paris lay directly through Warsaw. There was no room for an independent Poland in the Bolshevik plans, much as there was no room for an independent Ukraine. War had already broken out between Poland and the fledgling West Ukrainian People’s Republic (WUPR) in late 1918 as they battled amid the wreckage of the Habsburg Empire. However, many in the far larger Ukrainian People’s Republic (UPR), based in the Ukrainian lands that had previously been part of the Tsarist Empire, saw Russia as the main enemy of Ukraine’s independence. Both “red” and “white” forces in the ongoing Russian Civil War regarded Ukraine in its entirety as Russian territory and opposed the creation of an independent Ukrainian state. In Kyiv and Warsaw there were advocates of compromise, but it was not possible in 1919 to agree upon an alliance between Poland and Ukraine. Meanwhile, Russian attacks on Ukraine continued and the country’s statehood bid began to flounder. By the start of 1920, much of Ukraine was under Bolshevik occupation and preparations were underway for a communist offensive against Poland. 40
Polish-Ukrainian Alliance In order to secure lasting peace in the region, Polish leader Jozef Pilsudski planned of creating a federation of states on the former lands of the Polish-Lithuanian Commonwealth, the Early Modern state that had dominated much of the region in the sixteen and seventeenth centuries. In alliance with Poland, this federation would protect Central and Eastern Europe from future Russian aggression. Independent Ukraine was to play an important part in Pilsudski’s plan. The Red Army had largely destroyed the Ukrainian state apparatus by winter 1919/20, but the Ukrainian government and parts of the Ukrainian army were able to escape to Poland together with leader Symon Petliura. In order to preempt the attack of Russians, Pilsudski brokered an April 1920 Polish-Ukrainian alliance and military treaty. According to the terms of the agreement, Warsaw officially recognized officially the Ukrainian People’s Republic, while Ukraine officially recognized contested areas in today’s western Ukraine as belonging to Poland. The Polish-Ukrainian campaign began in spring 1920 and was initially successful. By 7 May, joint Polish-Ukrainian forces had liberated the capital of Ukraine. A victory parade took place on 9 May in the heart of Kyiv, featuring Polish and Ukrainian troops marching side by side. The Red Army evacuated into eastern Ukraine, but the war was not over. The Bolshevik counterattack began at the end of May, led by Semyon Budyonny’s First Cavalry Army. Ukrainian and Polish forces fell back for much of June and July. As the retreat continued during the early summer months, most inter-
Battle of Warsaw
The threat of impending Bolshevik conquest sparked a wave of patriotism across Poland and led to bitter resistance. Tens of thousands of new volunteers joined the army. The decisive moment came as the Red Army closed in on the Polish capital. Pilsudski rejected the concept of defense. Among the various offensive plans available to him, he chose the most dangerous one that also offered the best chance of defeating the enemy. With the advancing Bolsheviks overextended and exposed, the Poles caught them completely by surprise with a rapid attack, leading to the collapse of the Red Army offensive and sparking a general retreat. Many regard Poland’s victory at the Battle of Warsaw as one of the most decisive battles in world history. It prevented the Bolsheviks from carrying their revolution into the heart of Europe, but it failed to rescue Ukraine’s dreams of independence. Instead, the conflict continued with Ukrainian troops fighting alongside their Polish allies and under their
national banner to the end. Ukrainians took part in the defense of Polish city Zamosc in late August, holding up a Bolshevik cavalry army for long enough to allow other Polish units to enter the fray and secure victory. An officer of the Polish Tenth Infantry Division was full of praise for the valor of the Ukrainian troops. “One could revere the Ukrainian soldiers. They were fighting shoulder to shoulder with us as if it was a contest. They did not move even once,” he wrote. Episodes like the defense of Zamosc served to underline the missed opportunities of a Polish-Ukrainian alliance earlier in 1919. With Bolshevik and Polish forces both exhausted, an armistice agreement came in late 1920. A peace treaty followed, signed in Riga in March 1921. Poland preserved its independence and the independence of the Baltic States, but Ukraine’s statehood dream would remain unrealized for a further seventy years. The war had prevented a Bolshevik invasion of Europe, or at least delayed it for two more decades. The peace agreement marked the end of Pilsudski’s idea to create a federation of states centered on Poland and Ukraine to guard against Russian aggression. With the signing of the peace treaty in Riga, this concept lay abandoned. It was ahead of its time and failed to interest the European politicians that might have created this federation.
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national observers considered Poland to be a lost cause. The Bolsheviks were also confident of their coming victory and created a Temporary Revolutionary Committee to substitute the government of the conquered Polish state. Officials in Moscow even reportedly prepared the details of a ceremony to award victorious Red Army commander Tukhachevsky with a golden saber for the conquest of Poland. This ceremony was to take place on the Castle Square in Warsaw itself. Meanwhile, the Russians also printed Polish-language posters threatening death to anyone who might try to resist the Red Army.
About the author: Janusz Odziemkowski is a Polish historian, professor, and Head of the Military Affairs Research Institute at the Faculty of Historical and Social Sciences, Cardinal Wyszyński University in Warsaw
25 Years of PZU Ukraine Group
The Road to Success
Company profile: international financial insurance group
In the summer of 2018, PZU Ukraine Group celebrated a quarter of a century of activity in Ukraine. The last 25 years in Ukraine have been marked by dynamic growth and the expansion of insurance services. PZU Ukraine Group is currently among the top five largest insurance companies in the Ukrainian market. The PZU Ukraine Group has over 800 employees, who, together with more than 2,000 agents and partners, have provided services to more than nine million customers. On average, the PZU Ukraine Group concludes about 4,000 new insurance policies per day. In 2017 alone, PZU Ukraine Group paid over UAH 543 million in compensation. The history of international financial insurance Group PZU began more than 200 years ago in 1803. Today, PZU Group is one of the largest financial institutions in Central and Eastern Europe with gross written premiums in 2017 of more than PLN 22 billion. PZU Group has over 22 million customers in five countries and manages assets totaling above PLN 300 billion. 42
The roots of PZU Ukraine Group date back to the founding of Skide-West in 1993 and the founding of Skide-West Life, which were later acquired by the PZU Group in 2005. As a result of this transaction, three companies were created: PZU Ukraine (property and other individual insurance services), PZU Ukraine Life (life insurance) and SOS Service Ukraine (assistance services). Currently, the PZU Ukraine Group offers more than 120 insurance products in real estate, transport, tourism, and more. These products will continue to form the backbone of the PZU Ukraine Group portfolio. The Group is behind record-breaking innovations in auto insurance, becoming the first insurance group in the country to introduce direct settlement of MTPL insurance claims. This has simplified and accelerated the settlement of insurance claims for clients. Accreditation agreements are already in place with official importers of Infiniti, Renault, Nissan, Mazda, Suzuki, Mitsubishi, Toyota and Lexus. PZU Ukraine Group has also signed cooperation
agreements with leading Ukrainian leasing operators Ilta Leasing, OTP Leasing and ULF Finance. In line with a longstanding leading position in travel insurance, PZU Ukraine Group offers customers a unique service covering reimbursement of expenses for visa denials. One of the key development areas is the expansion of the PZU Ukraine Group presence in the corporate insurance segment, including agri-
PZU Ukraine Group in numbers Over 800 employees
More than 100 offices in Ukraine Over 120 insurance products
Every day, SOS Service Ukraine employees take more than 1,000 calls from customers Around 4,000 policies daily
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cultural insurance services. Meanwhile, among the most innovative proposals provided PZU Ukraine Group for life insurance on the Ukrainian market is the Social Protection program for employees, which allows employers to reduce internal costs and increase employee loyalty. PZU Ukraine Group is a member of numerous professional associations including MTIBU, the Ukrainian League of Insurance Organizations, the European Business Association, the MSPPU, and the American Chamber of Commerce in Ukraine. According to Ukraine’s “Insurance TOP” industry ranking, PZU Ukraine Group occupies a leading position in a wide range of categories including travel insurance, agricultural insurance and life insurance. PZU Ukraine Group conducts extensive corporate social activities, including a diverse portfolio of charitable initiatives. This includes support for the annual SENI CUP football tournament for people with disabilities. Educational activities include an initiative to improve road safety, within the framework of which special lessons were provided to 22,000 Ukrainian schoolchildren. Cultural events include an active role in supporting the “Under High Castle” Polish film festival and the annual ART JAZZ music festival.
“We are confident in the potential of the Ukrainian insurance market and in our abilities as a company to meet all the expectations of our customers,” says Jacek Adrian Matusiak, Chairman of the Board of PZU Ukraine. “I would like to express our gratitude to our customers for the trust they give us, to our partners for their loyalty and long-term cooperation, and to our entire team for their professionalism. It is for this reason that we hold such high market positions and intend to further strengthen them.”
Maintaining current levels of customer confidence and innovative services remain key elements of the company’s strategy in Ukraine. “We not only follow the latest trends in the insurance industry, but also create our own,” says Zbigniew Szolyga, General Director of PZU Ukraine Life Insurance. “This approach is rooted in our many years of experience. It relies on our team’s knowledge of the market and reflects our traditional corporate focus on the needs of our customers. Twenty-five years is an excellent opportunity to say thanks again to our customers and partners.”
25 years of insurance in Ukraine! Thank you for your trust! License of the National Commission for Regulation of Financial Services Markets of Ukraine Series АВ №500102 from 15.12.2009 year
Remembering the American pilots who helped Poland defend Europe
The Americans of the Kosciuszko Squadron emerged as heroes of 1920 war against Bolshevik Russia The Seventh Polish Fighter Squadron, also known as the Kosciuszko Squadron, played an important role in the history of the Second Polish Republic during the first years of its existence while also strengthening the bond between Poland and America. The Squadron’s origins date back to 7 November 1918, a few days before Poland officially regained independence. Back then, on a former AustroHungarian airfield in Rakowice near Krakow, the Poles began the formation of their first two air squadrons. These included what would become the Kosciuszko Squadron. The spring of 1919 was a breakthrough moment in the history of the Seventh Air Squadron. A young American captain named Merian Cooper was visiting Poland at the time as a member of the American Relief Administration, an American humanitarian mission in Europe following World War I. Cooper met with Poland’s General Tadeusz Rozwadowski and presented him with the idea of recruiting a group of American aviators. Cooper saw this as a chance to repay the debt America had owed to Poland since the American War of Independence in the late eighteenth century, when a group of Polish soldiers, including Tadeusz Kosciuszko and Kazimierz Pulaski, had fought for American independence. Merian C. Cooper was an extremely colorful character who seemed destined to make history. Many years later, he would have an equally glamorous if entirely different career in the movies, making him the only participant of the Polish-Bolshevik War to win an Oscar. Cooper’s greatest cinematic triumph was the 1933 Hollywood blockbuster King Kong, which he wrote, produced and directed. Cooper would eventually receive an honorary Oscar in 1952 for lifetime achievement. He then added a star on the Hollywood Walk of Fame to his collection of accolades in 1960, and remains the only Hollywood director to hold the highest Polish military decoration for valor, the Virtuti Militari. In May 1919, Cooper met with Polish Commander-in-Chief Jozef Pilsudski to present his idea. Cooper suggested rounding up a group
American pilot Merian C. Cooper was the man behind the creation of Poland’s Seventh Air Squadron or Kosciuszko Squadron. He would go on to win fame of a different sort in the 1930s as one of the men behind Hollywood’s King Kong movie and a cinema industry innovator of passionate American pilots, many of whom were still present in post-war Western Europe, and convincing them to join Poland’s fight for sovereignty. Cooper then left for Paris to begin the recruitment process. Once in France, he had a series of meetings with fellow pilots. Eventually, Cooper managed to gather a group of seven volunteers who agreed to serve under Polish command. This group included Major Cedric Fauntleroy, Lieutenant George Crawford, Captain Edward Corsi, Captain Arthur H. Kelly, Lieutenant Kenneth Shrewsbury, Second Lieutenant Edwin Noble, and Lieutenant Carl Clark. The American volunteers arrived in Po-
land at the end of September 1919. In October, just before leaving for the frontlines, they met with Pilsudski at Belvedere and welcomed another two volunteers: Lieutenant Edmund Graves and Lieutenant Elliot Chess. Shortly after arriving at their new unit, the American pilots familiarized themselves with the equipment they were going to use, including the Albatros D. III (Oef) fighter plane, as well as Polish air operations tactics. By the end of October, Major Cedric Fauntleroy had taken over command of the Seventh Air Squadron. During the first weeks of service in this unique and multinational squadron, Lieutenant Elliot Chess designed a new emblem. This iconic design featured numerous Polish and American national symbols such as a traditional fourcornered cap (rogatywka), a group of red and white vertical stripes referring to the colors of the American and Polish flags, a pair of crossed scythes and thirteen encircling blue stars representing the original American states. In the final days of 1919, the squadron received a new name in honor of Tadeusz Kosciuszko, the Polish hero of the American War of Independence. The idea to rename the squadron enjoyed support among the American pilots who saw it as a way of generating more interest among potential US recruits. During the first weeks of 1920, crews of the Kosciuszko Squadron mostly conducted patrol flights as the inevitability of conflict with Bolshevik Russia became increasingly clear. Fighting began in February and intensified in April 1920, when Polish forces started their military offensive in Ukraine. Luckily, at that time Bolshevik forces were not prepared to defend against air assaults, making it easier for the Kosciuszko Squadron to perform combat missions. However, the first successes on the battlefield came at a price when the unit lost a fighter pilot. Losses soon mounted up. During a 26 April air assault on Bolshevik forces, Second Lieutenant Noble was badly hurt. Surprisingly, despite receiving serious wounds, he managed to fly his plane back to the squadron’s airfield unaided. Despite months of treatment and rehabilitation, the young American :
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Honoring Polandâ€™s most celebrated American aviator: a modern Polish Air Force MiG-29 fighter jet with a portrait of Merian Cooper on its tail (Photo: Thomas Ranner)
poland in ukraine
Monument “To American heroes who gave their lives for Poland 1919-1920” within the Polish military memorial at Lviv’s Lychakivsky Cemetery known as “The Cemetery of the Defenders of Lwow” or “The Cemetery of Eaglets” (Photo: Consulate General of the Republic of Poland in Lviv)
: aviator never regained full physical fitness
and had to be relieved of his duties. By late spring, bolstered by deliveries of Italian Ansaldo A.1 Balilla fighter planes, the squadron conducted its first strikes against the vaunted Bolshevik First Cavalry Army, also known as Budyonny’s Cavalry Army. These mounted forces were the pride of the Bolshevik forces and had begun to inflict heavy losses on Polish units, forcing them to retreat and complicating the strategic situation on the front. Towards the end of June, the pilots of the Seventh Squadron withdrew from the front for rest and repairs. During this recuperation period, the squadron welcomed new recruits to replenish
their numbers and replace those who had not returned from combat flights. At this point, Captain Cooper took over the command of the squadron from Major Fauntleroy, who took on the leadership of a newly formed air squadron and became commander-in-chief of the Polish Second Army’s aviation. In the middle of July, the squadron received orders to return to the frontlines. Captain Cooper was destined not to complete the journey. Instead, Bolshevik forces shot him down during his flight to the front, and his fate remained unknown until after the war when he managed to escape from Soviet captivity and return to Poland. This marked the end of his involvement in the campaign itself, with Lieutenant Crawford replacing Cooper as commander of the squadron. In August 1920, as the war ap-
Author: Michał Jarocki of the Altair Air Agency (Poland)
proached its decisive moments with the Polish victory in the Battle of Warsaw, the Kosciuszko Squadron made history when they helped to fight Budyonny’s Cavalry Army to a standstill, buying time for Polish forces on the ground and allowing them to regroup. This was to prove the squadron’s last major contribution to the campaign. In total, three American pilots died while fighting for Poland during the 1920 conflict. Many more sustained wounds. These American volunteers would go on to gain official recognition for their role in the war, with many receiving the highest Polish military decorations such as the Virtuti Militari and the Cross of Valor. They remain important figures in the PolishAmerican relationship and are remembered for helping to stop the spread of Bolshevism.
Five Ways to Entice Ukrainians to Come Home
Andy Hunder, President of the American Chamber of Commerce in Ukraine, Member of the National Reforms Council and National Investment Council, Treasurer of AmChams in Europe “There are 52 million of us,” went the catchphrase that was broadcast every evening on popular Ukrainian television channel 1+1 in the 90s. The numbers were based on a 1989 population census. It is uncertain how many people live in Ukraine today. Following Russia’s 2014 invasion and a subsequent significant labor migration outflow, the number has contracted by at least 10 million over the past two decades.
Approximately five million Ukrainians, roughly 25 percent of the country’s economically active population, work abroad. Around two million live in Poland. I visited Warsaw this summer; out of six Uber rides that I took, four of the drivers were Ukrainian.
A key reason for this hefty flight is that Ukraine has the lowest average monthly salary in Europe, a meager $320. The workforce in Poland earns four times more. In 2018, Ukrainians will send home $11 billion in remittances, a whopping 10 percent of the country’s gross domestic product. As Ukrainians continue to leave, the toll in the motherland is being felt.
As president of the American Chamber of Commerce in Ukraine, I hear from member companies about the challenges they face in retaining and recruiting staff, both blue and white collar person-
Ukraine’s growth forecast of 3.4 percent is not yet significant enough to bring about a mass homecoming. But now is the time to get things moving. nel. Some are flagging this as a risk in their business strategies and budgets, as the matter could impact their future operations in Ukraine. While Ukraine’s economy continues to grow, it is becoming more grueling to find good employees. One general manager of a large food and beverage manufacturer told me that four delivery drivers had left their jobs in one week and moved to Poland. Another local manager lamented that he couldn’t find a forklift driver for two months. Consultancies and law firms are also finding it more difficult to hire legal and business advisors. Although not critical at this point, the issue could further escalate and eventually deter investors and companies from setting up business in Ukraine.
This is not a new phenomenon. Over the past century, Ukraine has seen at least four waves of political and economic migration, resulting in a significant diaspora that is predominantly in Canada and the United States. The Ukrainian World Congress, the international coordinating body for Ukrainian communities abroad, claims to represent 20 million Ukrainians. But is it realistic for human capital to move from a more developed country to a less developed one?
India, the nation with the world’s largest diaspora, was one of the first countries to experience reverse brain drain. To motivate people to return, the government supports research and development centers, particularly in the spheres of technology, healthcare, and pharmaceuticals.
China is also undergoing a reverse brain drain, with Chinese scientists, doctors, professors, and technicians returning. Some reckon that the reason is China’s achievement in building top-notch research institutions and universities, and the result is that China is gaining from the knowledge and experience they’re bringing back. So, what would it take to get Ukrainians to return home?
The obvious factors include security, rule of law, a strong economy, affordable housing, low crime rates, accessible and high quality healthcare, and education. These undertakings will not be solved in a few years.
In the short term, Ukraine’s government recently urged large businesses to pay higher wages. Our own recent survey showed
that practically all of the members of the American Chamber of Commerce have already increased salaries for their employees over the past twelve months, with 25 percent of companies raising their staff ’s compensation by a third.
There are, however, some other initiatives worth considering. Here are five that the government should consider undertaking. First, initiate a program together with academia, NGOs, business, and diaspora organizations to recommend tangible proposals and incentives that would reverse brain drain and encourage migrants to return home. Young Ukrainians who studied or worked abroad and then returned home are already working to transform their country, working in the public and private sectors, and they should be supported.
Second, boost programs supporting small and medium-sized enterprises, encouraging returning Ukrainians to invest their remittances and accumulated savings by launching local businesses, thus utilizing the skills and experience they learned while living abroad.
Third, share stories of flourishing international and local companies operating in Ukraine. I often travel across the country and am inspired by the many stories I hear. These need to be emphasized. The National Investment Council and Ukraine Invest, agencies established to promote Ukraine as an investment destination, are a big step in that direction. Fourth, study the feasibility of select dual citizenship. Ukraine does not allow its citizens to hold two passports, largely due to the potential security risk. This risk should be taken seriously. However, a comprehensive review should be considered for those already holding two passports and for the diaspora. Finally, get the diaspora involved. Launch a campaign to encourage diaspora Ukrainians to visit and consider relocating to Ukraine. This could help to promote opportunities in sectors such as education, business, public administration, and volunteering. Ukraine’s growth forecast of 3.4 percent is not yet significant enough to bring about a mass homecoming. But now is the time to get things moving: Ukraine’s next census is scheduled for 2020. Source:the Atlantic Council
NEW PROSPECTS FOR SINGLE WINDOW
Igor Dankov, Indirect Tax Leader EY Ukraine Co-Chair of the Chamber Customs Committee
Finally, the long-awaited law regarding the Single Window system became a reality and came into force on October 4, 2018. Definitely, this is a win! I remember the beginning of this process – it was back in 2011 and we (as Chamber’s experts) were engaged in drafting the new Customs Code. We advocated the Single Window concept and my colleague Robert Zeldi proposed relevant provisions to be included into the Customs Code. The suggested approach was accepted. The Code (effective from 2012) recognized that various controls over cross-border movements of goods must be performed based on the Single Window principle. Since then there were many meetings and discussions regarding the implementation options. A larger number of people joined discussions, shared ideas and pushed forward the Single Window principles. Thanks to the Ministry of Finance, the Single Window has been launched from August 1, 2016 in limited functionality. And now, the new Law #2530 “On Amendments to the Customs Code of Ukraine and Some Other Laws of Ukraine on Ensuring the Functioning of the “Single Window” Principle and Simplification of Control Procedures for the Movement of Goods through the Customs Border of Ukraine” represents a solid legislative basis for extension of Single Window, so: • Within six months the State Fiscal Service has to implement web-portal “Single Window for International Trade” for obtaining permits and ex-
change of e-data between companies and state authorities with wider functionality. • The number of authorities connected to the Single Window system would increase. • Single Window may be used to remit customs payments and other levies. The Law introduces important changes to Ukraine’s non-tariff regulations: • Controls upon import of goods would be reduced to three types: phytosanitary control, veterinary control, and control over foodstuffs; • Radiological, ecological and sanitary-epidemiological controls would be canceled; • Official control measures would not be applied to the export of goods; • The Border Service would control the level of radiological security in check-points. Many thanks to those who devoted their time, drafted the Law and pushed it forward. The authorities should now make a lot of extra efforts aimed at proper implementation of the new Law, streamlining control processes and minimizing border delays. The American Chamber of Commerce in Ukraine and EY in Ukraine closely work with the Ministry of Finance and other authorities to improve the Single Window system. What is next? In our opinion, it is high time to pass the Law on Authorized Economic Operators!
THE OPPORTUNITY IN THE SHADOW
Dmytro Fedechko Head of Legal for Ukraine Louis Dreyfus Company Ukraine Co-Chair of the Chamber Customs Committee
Customs office of Ukraine is in the permanent state of reforming. Significant improvements like “single window” procedure or tightening regulations against popular schemes for contraband of commercial importing products designated for private use take place, at the same time when some illegal sectors gain scale that has never been seen before, as it happens with cars with foreign registration. In this situation attempts to assess if things are moving in the right or wrong direction turn into rather judgmental exercise that mostly depends on attitude to those who is currently in charge of reforms. Tracking progress with customs reforms and droving actionable conclusions is only possible if priorities and relevant KPIs are set, clearly communicated and aligned with respective stakeholders. Prioritization has to be based on robust analysis of economic and social implications of customs policies. This analysis has to take into account more factors than usual considerations on budget revenues.
It is common thing to mention that illegal import discriminates compliant importers, distorting competition. Meanwhile it is often underestimated how illegal import impacts domestic production and undermines inevitability of the country. Not only customs duties but taxes come into play here. It is rather straight forward for potential investors to calculate that establishing production in Ukraine will make their products subject to VAT. At the same time illegal importers usually get VAT refund abroad and never pay it in Ukraine. This unpaid 20% VAT advantage is often the engine of illegal import. It makes decision to invest in Ukrainian production much harder for any business. That is how thousands of people who engage in small scale smuggling for their living, deprive themselves of hope to have jobs, as they illegally bring products instead of making them in Ukraine. So game with reforming customs is definitely worth candle as stakes are higher than it at first appear.
Expert view UKRAINE’S OBLIGATIONS ON CUSTOMS WITHIN THE EU-UKRAINE ASSOCIATION AGREEMENT: DO WE HAVE ANY PROGRESS?
Oleksandr Prokhorovych Government Relations Manager METRO Cash & Carry Ukraine Co-Chair of the Chamber Customs Committee
After signing the Association Agreement between Ukraine and the European Union in two stages (political and economic parts) in 2014, it has fully entered into force on September 1st, 2017 after a long period of ratification. The main economic part of this Agreement is the chapter on Deep and Comprehensive Free Trade Area (DCFTA) which was temporarily applied starting from 01.01.2016 and defines the legal framework for the free movement of goods, services, capital and partly labor force between Ukraine and the EU. It also outlines regulatory convergence aimed at the gradual integration of Ukraine into the EU common market. On customs, according to Annex XV “Approximation of customs legislation”, Ukraine has an obligation to implement a plenty of regulations with clear deadlines stipulated by the Agreement: - EU Customs Code (including Authorized Economic Operators): Regulation (EU) No 952/2013 laying down the Union Customs Code (previously - Regulation (EC) No 450/2008) – within 3 years (i.e. 01.01.2019); - Common Transit and Single Administrative Document: Convention on the Simplification of Formalities in Trade in Goods and Convention on a common transit procedure – 1 year (01.01.2017); - Reliefs from customs duty: Council Regulation (EC) No 1186/2009 settingup a Community system of reliefs from customs duty – 3 years (01.01.2019);
- IPR protection: Regulation (EU) No 608/2013 concerning customs enforcement of intellectual property rights (previously - Council Regulation (EC) No 1383/2003) and Commission Implementing Regulation (EU) No 1352/2013 establishing the forms provided for in Regulation (EU) No 608/2013 (previously - Regulation (EC) No 1891/2004) – 3 years (01.01.2019). By implementing these best international practices on customs, Ukraine will ensure approximation of our legislation to the EU standards, reducing artificial barriers for international trade and increasing competitiveness of Ukrainian business in export-import activities. Also, by introducing such mechanisms our country will strengthen capacity of customs authorities for shifting their focus on fighting smuggling, illegal importation and counterfeiting. However, unfortunately, as of today none of these EU acquis communautaire was implemented by the parliament of Ukraine since 2016. Thus, so far there is no real progress in Ukraine’s European integration process on customs at the legislative level. Nevertheless, bona-fide business community is still waiting for timely fulfilment of Ukraine’s obligations under International Treaties for establishing more predictable and transparent customs procedures.
THE CHAMBER CUSTOMS COMMITTEE The Chamber Customs Committee has been uniting customs experts from all Member Companies since 2001. The Committee’s mission is to promote the development of the customs affairs, to exchange best practices in the application of customs legislation, and to facilitate the mechanisms for simplifying international trade. The Committee’s experts have been participating in the improvement of customs regulation in Ukraine for seventeen years. In particular, we were engaged in the development of the new Customs Code of Ukraine of 2012 and the Draft Law regarding Authorized Economic Operators, supported the launch of the “Single Window” system, and addressed the government authorities with the business community’s proposals regarding the amendments to the customs legislation. In 2018, the Chamber Customs Committee is focused on the following issues: • Customs reform; • Simplification of international trade, inter alia the institute of Authorized Economic Operators, “Single Window” system, and automated customs clearance; • Implement effective measures to ban trading and distribution of illegally imported and counterfeit goods and services.
In order to effectively address the abovementioned priorities, the Committee actively interacts with the State Fiscal Service of Ukraine, the Ministry of Finance of Ukraine, the Verkhovna Rada of Ukraine Committee on Tax and Customs Policy, and other state authorities, as well as international organizations, diplomatic missions and nongovernment organizations, both in Ukraine and abroad. Within the framework of its operation, the Chamber Customs Committee holds regular meetings for Chamber Member Companies, arranges open discussions with the leadership of state institutions, develops proposals regarding amendments to the customs legislation. Oksana Shvets Chamber Policy Officer (Tax & Customs Issues) firstname.lastname@example.org
B2G Dialogue MEETING WITH PAVLO KOVTONIUK, DEPUTY MINISTER OF HEALTH On October 9, the Chamber Healthcare Committee held a meeting with Pavlo Kovtonyuk, Deputy Minister of Health, devoted to discussion of the importance of healthcare insurance system in Ukraine as well as the working plan for its successful implementation.
MEETING ON AGRICULTURAL LOGISTICS ISSUES HEADED BY VOLODYMYR KISTION, VICE PRIME MINISTER Timely meeting leaded by Volodymyr Kistion, Vice Prime Minister was held at the Cabinet of Ministers of Ukraine. In focus – issues related to products’ transportation in the agricultural complex. PANEL DISCUSSION “CONCESSION: TO-DO LIST FOR UKRAINE” The Chamber Members had a great opportunity to get engaged in a timely panel discussion “Concession: To-Do List for Ukraine”. Focal point: proper implementation of the Concession Reform in Ukraine is crucial for improvement of the overall investment climate in the country. Respective Draft Law’s adoption will not only unlock new investments in infrastructure sector, but also accelerate its sustainable development. ROUNDTABLE DISCUSSION “OPEN DIALOGUE WITH THE BUSINESS COMMUNITY” The Chamber Healthcare Committee jointly with the Ministry of Health (MoH) held a Round Table to discuss further transparent cooperation for improvement of the healthcare system and providing affordable and effective treatment for the patients. Moreover, the Chamber and the MoH signed the Memorandum on Cooperation stating mutual will and readiness to work together on improving the healthcare system.
B2G Dialogue MEETING WITH OLEKSANDR VLASOV, ACTING HEAD OF THE STATE FISCAL SERVICE The meeting was devoted to discussion of the recent changes in tax and customs legislation, plans of the State Fiscal Service as well as other important for business community practical issues within tax and customs spheres.
MEETING WITH SERHIY VERLANOV, DEPUTY MINISTER OF FINANCE In the framework of improvement of the interaction with all stakeholders, the Ministry of Finance held a meeting with Serhiy Verlanov, Deputy Minister of Finance and representatives of 25 business associations to discuss tax issues of greatest interest for business community for the moment. MEETING WITH REPRESENTATIVES OF THE “UKRTRANSGAZ” AND THE NATIONAL COMMISSION FOR STATE REGULATION OF ENERGY AND UTILITIES The meeting was devoted to the discussion of current issues on the natural gas market, inter alia status of introduction of the daily balancing, calculation of tariffs for the natural gas transmission services and other related issues. Some practical issues were also discussed at the meeting: procedure of change of the natural gas supplier, schedule of allocation updates by the Gas Transmission System Operator and mechanism for audit of corrective gas volumes. “BELIEVE IN LVIV” REGIONAL OUTREACH TRIP This year the American Chamber of Commerce in Ukraine launched a new platform Regional Outreach Trips and has already conducted a few successful and inspiring visits to the popular cities of Ukraine. On Sep-
tember 21-24, the Chamber Members had a great business trip “Believe in Lviv” filled with sightseeing, networking, and meeting with the Mayor of the Lviv City Council.
MEETING WITH VITALI KLITSCHKO, HEAD OF KYIV CITY STATE ADMINISTRATION
Members of the American Chamber of Commerce in Ukraine had an opportunity to voice issues of the highest importance to Kyiv Mayor Vitali Klitschko. In focus - development of Ukraineâ€™s investment projects & attracting FDI, plans of the Kyiv City Administration for 2019.
PRESENTATION OF GUIDELINES FOR CUSTOMS POLICY IN UKRAINE
On October 10, the business community of the American Chamber of Commerce in Ukraine expressed its vision on further development of customs policy in Ukraine. Guidelines for Customs Policy in Ukraine timely publication on acute issues in customs sphere prepared jointly by the Chamber and its Member Company - EY Ukraine. The overview of acute issues in various customs spheres faced by the Chamber Member Companies as well as expert recommendations on further improvements in customs sphere and application of the world best practicesâ€™ examples were also presented during the event. PARTNER OF THE EVENT AND PUBLICATION
Compliance Club Meeting The Chamber Compliance Club continues its activities aimed at spreading best practices in building effective compliance program. On October 2, the Club gathered representatives of the Chamber Member Companies to discuss such topics as risk assessment, conducting compliance trainings and internal investigations. National and international experts shared their experience and attendees were invited to participate in interactive activities during the meeting. SPONSOR OF THE EVENT
WELDI Business Breakfast: “Talk Less, Say More. Creating Value Through Communications” Sunny Friday morning started with a super inspiring WELDI (Women’s Executives Leadership Development Initiative) Business Breakfast with Yaryna Klyuchkovska, an expert in strategic and crisis communications. Yaryna shared her expertise and stressed on the role of communications in building personal reputation and a reputation of the company. SPONSOR OF THE EVENT
â€œCossack Treasuresâ€? Family Day During the Family Day all kids had an opportunity to quench their natural curiosity while exploring the world of Ukrainian Cossacks and search for real Cossack treasures. Meanwhile, adults enjoyed networking with fellow Chamber Members, delicious food and drinks, and walking around the territory of the Cossack village.
SPONSORS OF THE EVENT
Making Ukraine a startup nation Venture investments can transform Ukraine and unlock the country’s vast innovation potential novation, has an IT sector investment income tax rate of zero. In Ukraine, the figure is 9%. Only the daredevils remain, which includes those who soberly assess the difficulties but continue to move forward because they realize the prospects for significant gain are great. This is simply not enough. It is important to understand that the development of technological and innovative projects is a fundamental issue that will play a major role in determining the future of Ukraine as a country and shaping its competitiveness on international markets. Ukrainians cannot afford to rely solely on daredevils and leave the rest to chance.
The Global Context
About the author: Andriy Dovbenko is the owner of EVRIS law firm The main problem facing Ukrainian innovation is the gap between the idea and its actual implementation. Today’s Ukraine boasts many truly excellent specialists creating innovative solutions that have the potential to be globally competitive, but there is almost no economic support in the country to fund adventurous projects of this type. Engines do not work without energy, and venture investment is the fuel needed to propel a proper Ukrainian startup economy. This subject is the topic of a great many conversations but too little action is currently taking place. That needs to change. The right approach to venture investment could realistically transform the country’s economy and turn Ukraine into one of the world’s leading startup nations.
Unfriendly Environment for Innovation
Venture investments are by their very nature risky undertakings. However, this should not be senseless risk. Serious and well-researched venture investments are not hard to justify because genuine innovations have the power to change our lives. This is particularly true in a transitional nation like Ukraine, where change is part of the day-to-day landscape and the population is unusually receptive to technological breakthroughs. While Ukrainians are well disposed to innovation, we must also acknowledge that at present, we are catastrophically behind the entire Western world. In this environment, the shortage of venture funds has far deeper consequences than the lack of funding for individual projects. The fact is that without these funds, the professional environment is blurred and we have little chance to assess the bigger picture. There is no broader understanding of trends, which is essential even if you seek to go against the general flow, and there is simply no movement. Why is venture investment not developing more rapidly in Ukraine? The answers, as is often the case, are prosaic. Perception is part of the problem. Many perceive the risk levels in the Ukrainian economy to be so great that few decide to increase their risk exposure consciously. Taxes in this sphere are also unreasonably high. Estonia, which is widely recognized as a world leader in digital in62
Throughout the world, venture investment is an effective and widespread mechanism for the introduction of scientific developments into everyday life. The most easily understandable and relevant examples today can be found in the field of artificial intelligence (AI). Scientists have invented the technology of machine learning and startups offer ideas for the introduction of AI into everyday life. Venture funds, by filtering the flow of ideas, support ideas that potentially offer the most benefits to the public. Similarly, the Internet of Things and blockchain are not fun games or toys existing in the isolation of fantasy worlds. These are economic and social instruments changing lives on a daily basis. The role of venture investment here is to contribute to finding the most rational approach to the integration of these technologies into everyday life. For example, we are all at least vaguely familiar with the discussion surrounding the development of unmanned vehicles. At present, venture funds are not focusing on the development of unmanned transportation itself. Instead, they are already concentrating their energies on the study of how this will change cities. They are looking at where the attention of passengers will be directed, what will happen with regard to current parking facilities (experts predict a rapid reduction in the use of private cars), and how these territories may be reused.
Today, Ukraine is a consumer of technology. Could the country become a creator? Potentially, the answer is a resounding “yes”. The development of venture funds is one of the stages in the cultivation of an entirely new approach to technology in Ukrainian society. In my opinion, venture investment is also an element of decentralization in the broadest sense of the term. Startups come with an idea, venture funds support this idea, and together they contribute to changing society. The state, of course, retains the role of regulator, because many innovations require new legislation. The world of modern technology is both complex and democratic. Ukraine has every chance to become an important participant in the process of shaping the global future. It has all the tools to create new solutions and approaches to organizing life. Venture capital can play an important role in realizing this potential. The country must seek to remove artificial barriers to the activities of those looking to energize the Ukrainian startup scene. www.bunews.com.ua
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Judicial reform and legal tech in Ukraine Reforms are making progress but there is still significant room for improvement
About the interviewee: Anna Ogrenchuk is a member of Judicial Reform Council under the President of Ukraine, Chair of the Ukrainian Bar Association Procedural Law Committee, and Managing Partner of LCF Law Group A major judicial forum focusing on the reform Ukraine’s justice system and the impact of innovations on the legal industry will take place in Kyiv in mid-November. The seventh annual Judicial Forum (“Judicial System: Global and National Transformation”) will address judicial reform in Ukraine since 2014 and will look at how information technologies and digital tools can shape the future development of the country’s justice system. Ahead of the event, Business Ukraine magazine discussed the role of global innovations in shaping the future of the Ukrainian justice system with forum program coordinator Anna Ogrenchuk (Managing Partner of LCF Law Group) and key forum speaker Jin Ho Verdonschot (international legal tech and justice innovation expert).
Many people in the investment community regard judicial reform as the top priority in order to improve the Ukrainian business climate. How do you assess the progress in judicial reform since 2014? The effectiveness of the judicial system is an integral part of the investment attractiveness of any country. This importance was underlined further recently by the decision to introduce a new index into the 2018 edition of the World Bank’s authoritative annual Ease of Doing Business survey assessing the quality of legal proceedings. This new index 64
seeks to assess the implementation of modern practices and standards in four key areas: the structure of the judicial system and judicial procedures, the effectiveness of court proceedings, the level of independence enjoyed by the judiciary, and the availability of alternative methods for dispute resolution. In the 2018 edition of the World Bank’s Ease of Doing Business survey, the quality index for legal proceedings in Ukraine was nine out of a possible score of eighteen. Meanwhile, the average score for the countries of Europe and Central Asia was ten. This is not such a bad result. However, it also points towards significant room for improvement. What are the biggest remaining obstacles to judicial reform? The current judicial reform agenda is a story of attempts to address a large number of fundamental issues in a very short space of time. This is leading to the implementation of ambitious reforms in a variety of different directions simultaneously, including the transformation of the judicial system itself and the renewal of qualification assessments for members of the judiciary. Then there are changes to rules of procedure, reform of enforcement proceedings, changes to the prosecutor’s office and the legal practice in general. In order to make a success of such a
International investors who are considering Ukraine frequently cite a lack of faith in the Ukrainian court system as one of the main reasons why they hesitate to enter the Ukrainian market. This is costing Ukraine billions of dollars annually in lost FDI. What can be done to bolster the credibility of Ukraine’s courts? Today we are witnessing the overload of the Ukrainian judicial system. According to the State Judicial Administration, in 2017 local and appeal courts were considering almost 3.9 million cases. The total amount being claimed in business disputes was USD 25 billion, while there was a further USD 14 billion in creditor claims relating to bankruptcy cases. Taken together, these sums represent around 37% of Ukrainian GDP. Despite the high caseload within the Ukrainian justice system, the average resolution time for business disputes in Ukrainian courts according to World Bank figures is 378 days, which is significantly shorter than the corresponding averages for Europe and Central Asia. Another unfavorable trend in today’s Ukraine is the practice of adopting populist bills that do not have the necessary budget funding support. Meanwhile, the low execution rate of court decisions has a negative impact on the credibility of the entire judicial system. Based on our understanding of these problems, we would support such initiatives as the creation of an institutional framework for private executors and the automatic seizure of assets. The past few years have seen an influx of new Ukrainian judges. How credible has the selection process been and what impact are these appointments having on the functioning of the judicial system as a whole? The selection process for the Supreme Court was unique, both from the point of view of completely new procedures, and in terms of the unprecedented public interest it generated. The expansion of the judiciary, especially in terms of the introduction of lawyers and academics, is undoubtedly one of the main achievements of Ukraine’s post-2014 judicial reform process. The credibility that the judges received is already justified. We are seeing innovative approaches to dispute resolution. At the same time, the number of disputes currently before the courts does not allow us to talk about the unity and consistency of judicial practice in the country, and this is exactly what the business community currently requires. What role do you see legal tech innovations playing in Ukraine’s efforts to create a more credible and effective justice system? The digitalization of the communication process between the court and the participants in the judicial process is a key trend in the development of legal tech in today’s Ukraine. In the public sector, work is underway to automate judicial procedures and data accounting systems. These efforts include the introduction of a unified judicial information and telecommunications system and the launch of an “Electronic Court” pilot project. Meanwhile, there are also plans for the introduction of automatic asset seizure. In parallel to these public sector developments, legal tech startups are rapidly developing in the private sector in order to simplify work with court registers and prepare procedural documents. Internationally, there is already considerable experience of implementing online tools for the resolution of legal disputes between private individuals. During the coming Judicial Forum in Kyiv, we will hear more about one of these platforms from legal tech and innovation expert Jin Ho Verdonschot. www.bunews.com.ua
The Technology of Access to Justice
large-scale judicial reform process, it is vital to ensure effective communication with civil society and the business community as the end users of judicial services. The lack of a sufficiently effective communications strategy is currently the biggest challenge to the reform process.
About the author: Jin Ho Verdonschot is a legal tech and justice innovation expert. He is the author of the Dutch Rechtwijzer platform (the first online platform for the resolution of individual disputes in the Netherlands) and will be the keynote speaker of the Seventh Judicial Forum “Judicial System: Global and National Transformation” on 15-16 November at the Hilton Hotel in Kyiv. Across the globe, technological advancement is taking place at an unprecedented rate. Nowadays, technology plays a central role in our everyday lives. With the help of very user-friendly apps and websites, the accessibility and usability of many complex services has massively improved. People in Eastern Africa were the first to do all of their banking through their mobile phones. Today, many marriages begin with a swipe on a mobile app, while people increasingly seek mortgages and other financial products online. The legal system, on the contrary, reinvents itself at a much slower pace. This is reﬂected in the speed technology is integrated and the pace at which rules, procedures and approaches undergo reform to better help citizens and organizations streamline their relationships. Essentially, our legal systems still build upon the ancient foundations that have brought justice to people for centuries. The underlying principles are evidence-based and guide us towards a fair, transparent and independent judiciary, providing for a broad system of unbiased protection. For many, the legal system seems built primarily for legal professionals. The user-experience we offer our citizens does not measure up to the experiences they usually have when interacting with services and information in their daily lives. Why is it difficult for legal systems to move as rapidly and responsively as Silicon Valley? There are several reasons including a special kind of leadership challenge that results from our system of checks and balances. Crucially, there is no justice system CEO who can inspire progress with their vision. Additionally, the independence of the judiciary may make it more challenging to cooperate with high-tech suppliers. Meanwhile, rules of procedure are typically created by a small group of civil servants, experts and stakeholders through a high-stake, political process. This regulation of the legal services market often acts as a serious blocker to any innovation that would benefit citizens. 65
Turkish Airlines plans 50% Kyiv increase
air travel news
Turkey’s national carrier Turkish Airlines has announced plans to boost its weekly flights between Kyiv and Istanbul from 16 to 24 via a two-stage increase in November 2018 and February 2019. Turkish Airlines has one of the most extensive international airline flight portfolios in Ukraine and currently operates services from six Ukrainian cities: Kyiv, Kharkiv, Lviv, Odesa, Kherson and Zaporizhia.
US lifts Ukraine flight restrictions
In an indication of the improving security situation in Ukraine, the US Federal Aviation Administration (FAA) is allowing US airlines to resume flights to three Ukrainian airports following a four-year pause. America’s national air safety regulator gave permission for the renewal of flights to Kharkiv, Zaporizhia and Dnipro international airports, commenting that security and safety levels at these airports “have sufficiently stabilized” to allow for the resumption of services by US airlines and non-US airlines operating US airline codeshare flights. The FAA restrictions dated back to 2014 and came in response to the Russian seizure of Crimea and the Kremlin’s military intervention in eastern Ukraine.
SWISS to expand Kyiv-Zurich service
Switzerland’s national carrier SWISS has announced plans to double the number of flights it offers between Zurich and the Ukrainian capital starting from the end of March 2019. The move will mean the introduction of a daily service with new flights on Tuesdays, Thursdays and Saturdays. SWISS resumed flights to Kyiv in March 2018 following a four-year hiatus.
Boryspil posts 20% passenger growth
Coming Soon: Kyiv-Boryspil Airport Express A hotly anticipated express rail link connecting Boryspil International Airport to downtown Kyiv will enter service ahead of schedule by the end of November, according to Ukraine’s Infrastructure Minister Volodymyr Omelyan. The rail link is a long overdue infrastructure upgrade that will make the Ukrainian capital city considerably more accessible for international travelers at a time when Kyiv is experiencing unprecedented airline passenger growth and a rapid expansion of flight services, including the recent launch of multiple routes by leading European budget carrier Ryanair.
Many see the airport express service as an important element of Kyiv’s ongoing modernization. The introduction of a direct rail connection between Boryspil and downtown Kyiv will significantly ease congestion at the country’s main air hub and reduce reliance on bus and taxi services while also decreasing traffic pressure on key eastbound routes out of the city. The express rail service will run direct from Kyiv’s Central Station to Boryspil International Airport with an estimated journey time of 35 minutes. A one-way ticket on the USD 20 million express will cost UAH 80.
Boryspil International Airport recorded a 20% yearon-year increase in passenger numbers in September 2018 with 1.3 million passengers using the airport. Over the same period, Boryspil saw an 11.5% rise in flight numbers to produce a new monthly total of 9174 flights. These figures are slightly above the collective totals for the first nine months of 2018, which witnessed a 17.6% rise in passenger numbers and a 10.2% increase in flights.
Kharkiv to launch Rome and Milan flights
Kharkiv International Airport will launch direct flights to two Italian cities in early 2019 after concluding an agreement with budget carrier Ernest Airlines. The eastern Ukrainian air hub will welcome the first Ernest Airlines flights from Rome and Milan on 21 March next year. Ernest Airlines also recently expanded its routes from Kyiv to Italian destinations, with Milan and Rome flights launched in mid-October and a Genoa service expected in spring 2019.
The New Cold War
Could Learn a Lot from the Old One John E. Herbst: the Western world should reject Russian claims to a post-Soviet sphere of influence and increase support for the borderland states who find themselves on the frontlines of Putin’s hybrid war Territories between great powers—borderlands—have always been areas of strife. So it is with the countries caught between Russia and the West, those that were once part of the Soviet Union or firmly within its sphere of influence. Much of Europe has consolidated and, with the United States, established a lasting liberal democratic order, but Russia has been increasingly pushing back. Though most of the “borderlands” countries are now West-facing, Moscow wants to control at least the national security policies of its near neighbors. The West should reject Moscow’s claim. It contradicts Western principles and is dangerous to our interests. The United States should lead the West in adopting an explicit strategy of promoting democracy, open markets, and the right of nations to choose their own foreign policy and alignments. This includes their right, if they meet the conditions, to join the EU and NATO.
Acknowledging Putin’s Hybrid War
Moscow has not hidden its objectives—to grow its sphere of influence; shift the post-Cold War security order; and weaken NATO, the EU, and transatlantic ties—and is applying a full spectrum of methods to achieve them. The combination of these tactics is sometimes called hybrid war. This includes strengthening ethnic ties abroad and utilizing religion, disinformation, economic boycotts, energy cutoffs, corruption, and the strategic use of its intelligence services. Western powers have been slow to recognize the challenge posed by Russian President Vladimir Putin’s belligerent foreign policy. There was little criticism of Moscow for the 2007 cyberattack on Estonia; deferring to Kremlin sensitivities, NATO did not offer Georgia a Membership Action Plan at its 2008 summit; and when Moscow’s war against Georgia followed months later, the West levied weak sanctions on Russia and lifted them quickly. The West’s www.bunews.com.ua
sanctions on Moscow for annexing Crimea were also weak. NATO was slow to recognize Moscow’s challenge to the alliance. While the 2014 NATO summit did make arrangements for a rapid deployment force, it spoke of the need to “reassure” its easternmost allies rather than to deter the Kremlin. Only in 2016 did NATO decide to put battalions into the Baltic states, Poland, and Romania in order to dissuade the Kremlin from provocations there. With the deployment of these forces, NATO has done much to secure its eastern flank. But more needs to be done.
The notion that the West can buy peace by allowing Moscow to manage its neighbors—to exercise hegemony in its sphere of influence—is completely wrong. Indeed, history demonstrates this. The Kremlin’s war on Tbilisi and Kyiv has not dissuaded either capital from its Westward course. A new approach is needed. It should be based on older ideas established at the end of the Cold War: states are sovereign; they should enjoy territorial integrity and the right to choose their own political and economic systems. They should also enjoy the right to choose their international friends and allies. We need to return to this policy explicitly and with confidence. The United States should take the lead within NATO in laying out this vision and reminding the allies that the door to eventual NATO membership was left open to Ukraine and Georgia ten years ago. The recent accession of Montenegro and the prospective accession of the Republic of Northern Macedonia—both actively opposed by Moscow—are recent precedents for this policy.
Responding to Russian Realities
The NATO accession process must change to take account of the new hostile environment that Moscow has created. With Moscow : 69
“Advocates of accommodating Moscow think they are buying peace and stability. That is an illusion. Accommodation makes the borderlands places of Kremlin aggression and instability” : actively opposing membership for new countries, NATO’s granting
of a Membership Action Plan for a candidate country makes that country a Kremlin target without conferring on it the protection that membership offers. NATO should be willing to consider new membership criteria; it should consider the NATO-Georgia Commission and its annual national plans as models for membership. As part of this reconsideration, NATO should clarify that membership cannot be blocked by Kremlin aggression or occupation. The EU too must be clear on membership for its eastern neighbors. To its credit, the EU did not step away from the Deep and Comprehensive Free Trade Agreement (DCFTA) after Russian aggression against Ukraine began, despite timid voices in the West blaming the EU for the “Ukraine crisis.” Nor did it step back from its Eastern Partnership Program. But it should fully develop opportunities for greater cooperation under the Eastern Partnership—such as removing remaining barriers to more trade. It should also keep the door open for additional free trade agreements. Equally important, the EU should make sure that it does not short its own interests and dilute its policies to suit the Kremlin. This is particularly important in energy. The EU Energy Charter, which Moscow has signed but not ratified, requires Europe’s energy partners to allow the use of their pipelines to deliver hydrocarbons to Europe. But the EU does not insist that Gazprom open its pipelines to producers in Central Asia. This oversight strengthens Moscow’s hand as an energy supplier to Europe and gives it additional leverage over countries that, it claims, fall into its sphere of influence. Just as damaging is the EU’s countenancing the construction of the Nord Stream II pipeline from Russia to Germany. The European Commission has the power to stop this project. If Chancellor Angela Merkel will not or cannot turn off Nord Stream II, the commission should.
Strengthening the Borderlands
NATO and the EU should also enhance policies designed to help borderland countries strengthen domestic vulnerabilities that the Kremlin has exploited. This must include programs designed to limit
corruption and to clean up the banking sector. Moscow continues to buy influence through corruption, and the banking system is a prime facilitator as well as a means for money laundering. While Georgia has taken great strides to clean up its banking sector and reduce corruption, much more needs to be done in Ukraine and Moldova. Conditioning aid on reform measures is an essential tool the West should not hesitate to use. The United States and its allies should also consider further weapons transfers to Georgia and especially to Ukraine. Stopping the Kremlin is a vital interest. The front is currently in eastern Ukraine. The West’s interest in stopping Kremlin aggression in the Donbas justifies an aid package of USD 1 billion a year for five years for military equipment. It should include regular needs such as antitank missiles, secure command and control communications, sophisticated drones, and anti-aircraft radar for missiles. Under the same logic, the United States should consult with Georgia on its military needs. The United States with its NATO allies should also consider a greater presence in the Black Sea region. Regular exercises with Georgia and Ukraine should be enhanced, as should port visits to Batumi and Odesa. Romania is a natural partner with which to develop a more robust program. The United States should consider ways to draw Turkey and Bulgaria into greater cooperation. Armenia, Azerbaijan, and Belarus are also part of the grey zone. They receive less attention because they have not pursued closer relations with the EU or NATO as energetically as Georgia and Ukraine, and therefore have received less pressure from the Kremlin. But they have been subject to pressure. The United States and the EU should look for ways to increase cooperation with the three countries.
No Time for Illusions
Advocates of accommodating Moscow think they are buying peace and stability. That is an illusion. Accommodation makes the borderlands places of Kremlin aggression and instability. However, there is no reason to assume that the people of these regions are willing to forfeit their futures to autocrats in Moscow. Western principles and interests would be served by policies that back the aspirations of the people in these areas to determine their own future. The likely result would be the erasing of the borderlands and the creation of a Europe whole and free.
About the author: John E. Herbst is the director of the Eurasia Center at the Atlantic Council. He served as the US ambassador to Ukraine from 2003-2006
Credit Agricole Bank hosts annual macroeconomic review On 17 October, Credit Agricole Bank held its traditional autumn event “Macroeconomic review: summary and trends”, attracting around 200 corporate and premium customers of the bank to Kyiv’s Hilton Hotel. The focus of the event was the annual review and discussion of the latest macroeconomic trends in Ukraine and worldwide. “It is the fourth time in a row that we have organized this event dedicated to macroeconomic analysis and forecasts. Every year we observe increasing interest in the expertise provided by Credit Agricole. We are truly delighted to be able to share this added value with our customers,” commented Chairman of the Management Board Jean-Paul Piotrowski. “2018 is a special year for Credit Agricole. We are celebrating the 25th anniversary of the Group’s presence in Ukraine. During this period, we have gone from a bank of one hundred people specializing in international companies to a full service universal bank operating throughout the Ukrainian market, becoming step by step a reference bank in MNC and a leading bank in agri-agro and car financing. We intend to continue our development and our presence in Ukraine.”
Kyiv Art Exhibition Celebrates Century of Baltic Independence In 2018, the Baltic States celebrate the one hundredth anniversary of independence. To mark the occasion in Ukraine, an exhibition of glass artists representing all three Baltic countries premiered in October at KalitaArtClub gallery in the historic center of Kyiv. The exhibition, curated by Olena SomSerdyukova, was entitled â€œBaltic Confessionâ€?. Featured artists Anda Munkevica (Latvia), Ivo Lill (Estonia), and Remigijus Kriukas and Indre Stulgaite-Kriukiene (Lithuania) all dedicate themselves to the art of glass and produce works that offer a sense of the natural freedom associated with the Baltic States.
New French Initiative Celebrates Female Ukrainian Business Leaders October saw the launch of a new initiative by the French Chamber of Commerce and Industry in Ukraine (CCIFU) designed to promote female entrepreneurship in Ukraine. The “Created by Women” prize aims to honor and acknowledge Ukrainian women who have recently set up their own businesses. This new prize is the initiative of the CCIFU’s Business Women Committee. French Ambassador to Ukraine Isabelle Dumont will serve as the honorary president of the jury alongside CCIFU president Jean-Paul Piotrowski and Ukrainian MP Irina Suslova together with a host of company directors and senior professionals. The contest is open to all Ukrainian women with no age limits or professional restrictions, with applications via email welcome until 25 January 2019. The winner will be unveiled on 14 March, with the prize including mentoring from French executives and a five-day trip to Paris. For further details and application information, please visit the CCIFU website at www.ccifu.com.ua or call +38-098-6764510.
Speaking Ukrainian in Ukraine
should not be a political act
Ukrainian has never enjoyed greater state protection but speakers still risk encountering casual hostility Ever since achieving independence in 1991, Ukraine has wrestled with national identity issues driven by the need to strike a balance between complex postSoviet realities and traditional ethnic definitions of what it means to be Ukrainian. Language has occupied a central position in this ongoing debate, serving as a proxy battlefield for rival political forces wrestling with the legacy of Tsarist and Soviet russification policies stretching back centuries. Meanwhile, everyday life in Ukraine has evolved along broadly bilingual lines, with Ukrainian enjoying the status of official national language but Russian continuing to dominate at street level. The language issue has remained high on the political agenda since the 2014 Revolution of Dignity, with a series of legislative changes introducing Ukrainian language quotas for the Ukrainian media and obliging schools to adopt Ukrainian as the primary language of instruction. These measures have proven controversial, with critics claiming they discriminate against Russian speakers and other minority languages. However, many Ukrainian speakers say the reality is strikingly different, with the Ukrainian language still struggling to achieve everyday acceptance in parts of the country. Business Ukraine magazine invited Ukrainian-speaking American journalist Mark Raczkiewycz to share his experiences of linguistic politics in independent Ukraine. What I underestimated the most in 2002 when I first came to Ukraine to serve in the US Peace Corps was the ingrained legacy of the Soviet Union and ongoing Russian attempts to keep the country under its sway. This included language, even in the Carpathian Mountains region of Ivano-Frankivsk where I spent my first three years as a volunteer. There I found that much of the former Soviet nomenclature still ran many of the businesses and served in law enforcement. Little things stick out in my memory. I remember asking to communicate in either Ukrainian or English at a hair salon because the stylist insisted on speaking Russian. She balked at this, as if being asked to stoop beneath her dignified level. That summer, I visited a fellow volunteer in the Crimean city of Sudak. A bartender told me: “We don’t speak Ukrainian here.” At one point, he ad76
vised me that Ukrainian was not real a language at all, but rather an offshoot of Polish and Russian. Six years later, my sister and I visited Yalta. We soon discovered that speaking English was preferable to speaking Ukrainian. Service was horrible up to the point that wait staff simply ignored us when we asked for a Ukrainian-language menu because the English versions were incomprehensible or inedible (pizza with fungus, anyone?). Throughout my time in Ukraine, I have encountered too much hostility to the Ukrainian language to be able to recount every episode. These incidents vary in scale from the trivial to the physically threatening. On one typical occasion in Zaporizhia, the ticket seller at the train station was extremely uncooperative when I spoke Ukrainian. She only carried out the transaction when I started speaking in broken Russian. Then there was the time in a Kyiv convenience store when the woman behind the counter proceeded to curse and raise her voice at me for speaking Ukrainian. She even called me a “Banderite” as if that justified her actions. I have been spat at and told to “go back to the village” while playing blackjack in a casino. My wife once slapped a man for insulting me for speaking Ukrainian at a downtown Kyiv restaurant. In Slovyansk in April 2014 during the Russian takeover of the town, I suffered physical assault. As I tried getting closer to the main police department while speaking Ukrainian, I received kicks to the back and buttocks. I will not repeat what insults I heard in the process. I eventually walked around the block and successfully entered from the opposite end while speaking Russian. This response was not a surprise. By 2014, I had already learned that speaking Ukrainian in Ukraine often begets hostile treatment in one form or another, especially in the south and east of the country. Discrimination sucks. It makes you feel like you are second rate or inferior for speaking a language that is not the lingua franca. There have also been positive experiences. In Kharkiv at the start of the Donbas War, I was with a photographer at a Mexican eatery when the server noticed we were ordering in Russian but whispering in Ukrainian between ourselves. “It’s okay, we’re for Ukraine,” he told us. Older people
sometimes approach me when they overhear me speaking Ukrainian. They usually say how nice it is to hear the language spoken. I remember one man who told me, “I spoke Ukrainian when I was a child but ‘they’ uprooted that from us.” These positive and negative experiences are all reminders of the Russian and Soviet efforts to erase Ukrainian identity by depriving people of their language. Even now, the impact of these efforts is obvious. One historian told me that if the USSR had lasted for another two or three decades, western Ukraine would have become just as “Russified” as the rest of the country, which had been under Soviet rule for a generation longer. The Ukrainian language today requires smart promotion as well as protection. I wish it were cooler to speak Ukrainian in the country. Normally, my conversations in predominantly Russian-speaking Kyiv are bilingual, with me speaking Ukrainian and my conversation partner speaking Russian. That is fine with me, as long as there is mutual respect. However, when one encroaches on the other and crosses into the realm of discrimination, hostility and violence, then this is cause for alarm. Today, Russian is still the lingua franca in much of independent Ukraine. I would not mind so much if this prevalence did not interfere with the promotion of the state language.
About the author: Mark Raczkiewycz is an American journalist based in Kyiv where he works as correspondent for The Ukrainian Weekly. He has contributed to Bloomberg, Financial Times, Associated Press and other international media
Contemporary art extravaganza in Zhytomyr Austrian artist Gerhard Fresacher will be center stage on 7 November as Zhytomyr hosts the NO DISCO BEHIND arts extravaganza
The geographical focus of Ukraine’s vibrant contemporary art scene will switch to Zhytomyr in early November as the central Ukrainian city plays host to a highly ambitious concept event set to take place on the grandest of scales. Initiated by Zhytomyr-based Austrian company Eurogold and orchestrated by Austrian artist Gerhard Fresacher, the NO DISCO BEHIND evening will feature a dizzying array of paintings, sculptures, installations, performance art and disco dynamics set against a cavernous 14,000 square meter backdrop of industrial architecture. It is no exaggeration to say that sleepy Zhytomyr has never seen anything quite like it before. NO DISCO BEHIND will feature the works of a range of Austrian, German and Ukrainian artists, who will come together in a variety of mediums to tell the story of Chekhov’s “Three Sisters” in a new and entirely original manner. Performing artists will include Bhima Nemesis Griem (Germany), Michael Maier, Igor F Petkovic‘, A W Grill, Niko Sturm and Manfred Plessl (all from Austria) and Lera Nikonova & Friends (Ukraine) along with a range of international and local musicians, performers, actors and other colorful characters. Speaking to the Zhytomyr media during preparations for the November event, Austrian artist Gerhard Fresacher said the sheer scale of the NO DISCO BEHIND concept reflected perceptions in 78
Austria of Ukraine’s giant size and prominence on the European map. It will feature around 200 separate exhibits. Collectively, they will seek to identify and explore common cultural currents linking the epochs of human history, with contemporary social media titillation and chatroom banter juxtaposed against the classics of world literature and pop art images embellished by theatrical flourishes. Fresacher is no stranger to marquee artistic performances. His background in theatre and TV production has combined with a classical artistic training to produce a multimedia approach that makes the Austrian a particularly versatile curator capable of coordinating highly eclectic events. Born in 1972 in Austria, he graduated from Vienna’s Academy of Fine Arts under the mentorship of professors Erich Wonder and Cristoph Kleber. Fresacher has since worked as a theatre artist, movie and TV show producer, sculptor, film director and theatre director, collaborating with the likes of Hugo Boss, BMW, Ferrari, Hamburg Talia Theatre and the City of Vienna. He currently splits his time between Carinthia and the Austrian capital. This arts extravaganza in Zhytomyr is taking place under the patronage of Austrian Ambassador to Ukraine Hermine Poppeller and aims to attract the attention of the arts community in nearby Kyiv. Ukraine’s contemporary arts scene has thrived in recent years as the country has reveled in its grow-
ing reputation as Eastern Europe’s newest hipster hangout, but much of this swagger has remained firmly within the boundaries of the capital city itself. “NO DISCO BEHIND” is a timely reminder that Ukraine’s cultural universe extends far beyond Kyiv. The event aims to bring together Austrian and Ukrainian artists while building cultural bridges between the two nations. It may also provide inspiration for other Ukrainian regional capitals and serve as a welcome stepping stone towards a more geographically diverse approach to the development of the contemporary arts in today’s Ukraine.
NO DISCO BEHIND
Art exhibition by Gerhard Fresacher 7 November from 18:30 Eurogold Industries Ltd. 1/154 Promyslava Street, Zhytomyr Phone: +38-050-463-4535 email@example.com
Top European clubs queue up for Dynamo wunderkind Tsyhankov Dynamo Kyiv’s latest midfield prodigy could become Ukraine’s next big footballing export
A host of top European clubs are being linked with Dynamo Kyiv midfielder Viktor Tsyhanov, with Premier League club Tottenham Hotspur reportedly preparing to make a bid for the Ukrainian starlet when the English transfer window opens in January 2019. Spurs manager Mauricio Pochettino is said to be a big fan of the Dynamo player and is eager to add young talent to his squad after failing to make any signings during the summer 2018 window. The Argentine trainer will likely face stiff competition from some of the leading sides in Europe. Fellow English Premier League title contenders Liverpool, Manchester United and Manchester City along with Barcelona and Bayern Munich are all reportedly following Tsyhankov’s progress closely. The Dynamo Kyiv player has caught the eye since breaking into the first team two seasons ago. Still only twenty years of age, he is already one of Dynamo’s standout performers, scoring an impressive 25 goals from midfield in just over seventy games for the club. Tsyhankov rose to prominence during the 2017-18 season when he established himself as a first team regular and netted thirteen times in twentyseven league appearances. Impressive as they 80
are, these statistics do not do the flame-haired attacking midfielder justice. Tsyhankov plays with a self-confident swagger that belies his youth and relative inexperience. Naturally twofooted and always eager to run at defenders, he has the skills, strength and pace to make a menace of himself against any opposition. Tsyhankov was born in Israel where his father Vitaliy played as a professional footballer. After returning to Ukraine, he joined the Dynamo Kyiv youth setup. Many now see him as the most exciting prodigy to emerge from the Kyiv club’s academy system in a generation. He has represented Ukraine at every level from Under 16 onwards, and made his international debut against Finland in November 2016 while just eighteen years of age. If Tsyhankov does make a move in the coming months, he will become the latest in a long line of Ukrainian stars to try their luck in Europe’s top leagues. Few have enjoyed much success. Most of the teams linked with Tsyhankov are English, but the Premier League has been particularly unkind to Ukrainian imports. Dynamo Kyiv legend Serhiy Rebrov was the first big name Ukrainian star to ply his trade in the English top flight, signing for
Tottenham Hotspur in 2000 amid much fanfare. Rebrov was very highly rated at the time, having emerged as one half of Europe’s most prolific Champions League strike partnership alongside Andriy Shevchenko in the swashbuckling Dynamo Kyiv side of the late 1990s. The diminutive Ukrainian striker bagged a remarkable 26 Champions League goals over the course of three seasons prior to his move to North London, but he was unable to translate this into Premier League success. Instead, Rebrov struggled to establish himself and managed just ten goals in fifty-nine league appearances for Spurs. A subsequent spell at West Ham proved even more fruitless, producing a solitary goal in his single season with the club before returning to Kyiv in 2005. Other Ukrainian underachievers in the English top flight include Andriy Voronin, who struggled during his 2007-2010 spell at Liverpool, registering just five goals and suffering the indignity of seeing his glamor-loving wife mocked by the English tabloid press as “the world’s worst-dressed WAG”. The biggest Ukrainian disappointment of all was national hero Andriy Shevchenko, who arrived at Chelsea for EUR 44 million in 2006 following seven imperious seasons at AC Milan but was unable to find his feet in the English game. Many pundits rate him among the most expensive flops in Premier League history. Fellow former Dynamo striker Andriy Yarmolenko had hoped to break the hoodoo on Ukrainian attackers following his summer 2018 move to London’s West Ham United, but after exciting fans with an early brace of goals away at Everton, he sustained a serious injury and is unlikely to play again this season. With Ukrainian strikers enjoying no luck in the Premier League, no nonsense defender Oleh Luzhny remains perhaps the country’s most successful footballing export to England. The former Dynamo Kyiv captain signed for Arsenal in 1999 and went on to make over 100 appearances for the club, winning the 200102 Premier League and the 2003 FA Cup. He remains a well-regarded figure among Arsenal supporters.
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PricewaterhouseCoopers survey: Kharkiv is Ukraine’s No. 2 IT hub
PricewaterhouseCoopers has produced the most detailed survey to date of the Kharkiv IT sector and identified the eastern Ukrainian city as home to the country’s second largest IT hub. According to the PricewaterhouseCoopers findings released in October, the Kharkiv region has 25,000 IT specialists, or 14% of the national total, placing it in second position among Ukrainian cities behind Kyiv but ahead of IT rivals such as Lviv, Odesa and Dnipro. This stands to reason, not only because Kharkiv is Ukraine’s second-largest city with a population of over one and a half million, but also because it is traditionally one of Eastern Europe’s leading academic hubs. Today’s Kharkiv boasts dozens of the region’s most respected institutes of higher education and is home to a vast student population. According to the PricewaterhouseCoopers survey, the Kharkiv region has an estimated 445 IT companies and the industry has a strong export orientation. Over 95% of revenues in 2017 came from international sources, with key markets being North America (65%) and the European Union (25%). Based on analysis of the research data, the estimated revenue of Kharkiv IT companies will more than double over the coming seven-year period, rising from an anticipated USD 800 million
in 2018 to USD 1.85 billion by 2025. This growth would be in line with nationwide trends that have seen the Ukrainian IT sector emerge in recent years as the country’s third largest industry by export volumes. Ukraine is currently the number one country in Central and Eastern Europe in terms of outsourcing volumes. The Ukrainian IT industry is expected to grow to USD 10 billion in value by 2020, with the local software development community expanding alongside revenues. Ukraine already ranks fourth internationally in terms of the number of tech workers, with the current national total of over 160,000 IT professionals placing it alongside the industry’s three global leaders India, the United States and Russia. This talent pool is attracting some of the biggest names in the business. Ukraine is now home to over 100 R&D centers for global tech leaders including Samsung, Apple, Skype, IMB, Microsoft, Siemens, Ericsson and Boeing. With an estimated 36,000 Ukrainians graduating from the country’s universities in IT-related fields each year and many more Ukrainians retraining via an expanding industry of specialist IT schools, there is no sign of the Ukrainian IT industry’s robust growth slowing down any time soon.
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