Ukraine is at a tipping point.
What does the future entail? Failed state? Or economic prosperity for 40 million people?
Without a doubt, 2019 will go down in history as a pivotal year for Ukraine. The last couple of years have yielded slow economic degradation. The only possibilities seem to be either a j-curve on the road to prosperity or a deep slide into a failed state.
Yes, 2019 is a year of presidential and parliamentary elections. These events of course are of critical importance but in my humble opinion are secondary in nature.
It is equally difficult for people, outside and inside of Ukraine, to see the ‘tipping point’ because Ukraine is full of contradiction. Ukraine is notorious for corruption but unlike previous times, today, everyday authorities arrest people that take or give bribes; the majority of international observers do not see that. Unfortunately, most offenders do not go to jail. Instead they are removed from the system and they lose their voice. Still, sophisticated corruption schemes are prominent at the highest levels of the government along with the business elite. At the same time, people are willing to die for independence and yet many want a “strong man” to lead the country.
While economic indicators are rising from a low base signaling a turn around, investors do not return due to a lack of trust. Ukraine’s businesses are screaming for new markets, strategic partners, education and liquidity. Meanwhile, over 40% of Ukraine’s GDP is in the “shadows,” and therefore unaccounted for.
The country is in a hybrid war with Russia: Sure, it has full intentions to embrace western values. This would indicate significant anti-Russian sentiment — yet how can one explain trade has increased by double digits with the “enemy?”
Ukraine’s geopolitical role in the economic tension between United States, Russia, China and EU makes it difficult to forecast where the country is going to be in five years. As Wall Street traders say, ‘”there is no trend line.” But one thing is very clear: There is a “fight” between letting go of the known past and embracing an uncertain future.
Ukrainians have no choice but to embrace the uncertain future without fear and without reservation. There are several major underlying trends that are irreversible and irrespective of the political outcomes in 2019 that will define Ukraine for foreseeable future:
No more “Mother Russia”
Russia is seemingly holding Ukraine back. Russians under any leadership will continue to attempt to influence the economy and politics of Ukraine. Fortunately, the grip that was on Ukraine for hundreds of years is gone. After the annexation of Crimea, over 13,000 citizens killed and millions displaced, Ukraine is permanently out of Russia’s economic and psychological grip.
There are two major positive and negative trends.
Positive: The younger generation is coming to power. This group has never experienced the reign of the Soviet Union while adults and those of older generations have no resources, drive or knowledge to sustain the fight.
Negative: Declining birth rates have been rising, exacerbated by a “brain drain” to more lucrative salaries and tech opportunities in the west.
Ukraine’s businesses are poised and government agencies are forced to use the latest technology across all operations to greatly improve efficiency and allow full transparency in order to build trust and adaptability. Additionally, the latest technology makes corruption schemes on all levels much harder to execute and keep hidden from public scrutiny.
For Ukraine, intellect will drive economic prosperity in the 21st century. Its 99% literacy rate, history and culture of revolutionary innovation, gas deposits that can support over ten percent GDP growth for 75 years and vast agricultural lands that are envied by many other countries are factors that show why Ukraine has among the best economic opportunities in the world. All sectors of the economy — from all types of infrastructure to its space program — can easily absorb tens of billions of dollars of investment with potential ROI ahead by double digits from similar investments opportunities in other parts of the world.
In reality, 2019 will have minimal activity on the investment front for the country’s future. Everyone will be waiting for the political and possible geopolitical outcomes to materialize which will make things clear.
With that being said, it is important to understand that Ukraine and its supporters around the globe should not waste time. All must focus on building the foundation that tips the scale towards a prosperous future in the next twelve months.
I propose to start the change with a discussion that will unite people within and outside of Ukraine about the future direction of the country: this all starts with identity.
What does Ukraine stand for? What is the country’s ideology? What are its people’s values? What is the country’s vision?
Historic transformations of idolic countries like Israel and Singapore began with a very specific focus on the country’s identity, ideology, and vision for the future. It is a great road map for Ukraine to follow. As an Ukrainian native and US citizen, here is where I stand.
Ukraine will have a “digital democracy” that values transparency, prosperity and social responsibility. It is simple: Technological innovations make all government and non-government activity transparent. It increases trust between the government and its people along with furthermore eradicating corruption. Simultaneously, it increases efficiency in all operations that would lead to economic prosperity and an opportunity to gather real time data to engage the government, corporations and local communities in a collaborative effort to serve those in need.
Ukraine is the “intelligent logistics hub to the world”. The vision is based on three core assets of Ukraine: The intellect of its people, natural resources and geography.
Ukrainian combined intellect can make the country a leader in over twenty industries in the 21st century. Examples include nanotechnology, aggrotech, space, new materials, biomass, robotics and many others.
The natural resources of the country reduce costs across the board from production to logistics. Its ideal geographic location, being in the center of Europe, with availability of modes of transportation infrastructure — which all needs to be refurbished for the 21st century.
Easy access and travel to countries of the European Union, Asia, Middle East, Africa and Russia will make Ukraine an intelligent logistical hub to the world. Although it may be common sense from an outside perspective, it is vital that Ukraine implements these ideas and show the world its potential.
The world must pay attention
For the first time in history, the United States, China, European Union, Russia and counties of Middle East have an opportunity to coordinate economic renaissance with each other and in the process create new economic models of cooperation. A thriving Ukraine will become a country that unites humans need for a better life. Without further adieu, lets “tip” Ukraine into prosperity for all.
Henry Shterenberg is a Columnist at Grit Daily. He is the CEO of GTP, the Global Transformation Platform.