Commenting on the primary problems to be solved in Ukraine, U.S. Ambassador to Ukraine John Herbst pointed out corruption and re-privatization.

“The state still plays a large part in economy. You have a great number of laws and regulations, which contradict each other and which pose obstacles in the way of development of your economy. I am convinced that the problem of corruption follows this. If there are many mutually contradictory laws, any official can influence the life of a Ukrainian citizen, and, consequently, can demand recompense from a citizen. This is the very essence of corruption,” stated Mr. Herbst in an interview to the newspaper “Delo”.

Touching upon the question of re-privatization held in Ukraine after the orange power had come to power, U.S. Ambassador to Ukraine noted that interests of American entrepreneurs had not suffered from this process and re-privatization had not touched American investors. However, John Herbst pointed out that the USA considered this policy mistaken.

“In our opinion, re-privatization undermines the fundamentals of investments, which are needed for development of the country. Despite the fact that privatization was held in uneasy times and a lot of objects were privatized not quite honestly, the revision of privatization’s results does not serve national interests. In no way I defend oligarchs, but I know that if a country returns several tens or even hundreds of enterprises to national property, it will damage gravely economic development of a country. Ukraine does not need this,” underlined Mr. Herbst.

Focusing on the investment climate of Ukraine, John E. Herbst mentioned the improvement of the situation within last months which has started when the Cabinet proved its intention to give up the re-privatization policy. “Under the presidency of Yushchenko Ukraine succeeded fighting against the corruption though not in full. And now the foreign investors start treating Ukraine as a reliable place of their capital investment. The investment climate ultimately has been improved but still it is far from an ideal,” explained Mr. Herbst.

Commenting on the reasons impeding the foreign investments, he pointed at the drawbacks of some Ukrainian laws and uncertainty of the political future of Ukraine on the eve of the parliamentary elections. “None knows who will be the winner. It is good for democracy but it is rather unfavourable aspect as for the investors. Regarding the interests of the investors, I should say that it will not be good if newly elected government restart the process of wide re-privatisation,” said the US Ambassador.

He also emphasized that the US companies operating in Ukraine had been high on the list of foreign investors, when Lakshmi Mittal bought Kryvorizhstal. Then Americans might be shifted to the second place, Mr. Herbst concluded.


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