You are using an outdated browser. Please upgrade your browser to improve your experience.

Former Polish foreign economic relations minister takes top business watchdog role in Ukraine

15.10.2019

Ukraine’s Business Ombudsman Council, the country’s watchdog that monitors unfair state activity in relation to business, appointed the Polish politician and economist Marcin Swiecicki to its highest position on Oct. 15.

Swiecicki, 72, was mayor of the Polish capital Warsaw in the mid 1990’s and also served as Poland’s foreign economic relations minister between 1989 and 1991.

A top goal for the new business ombudsman will be to monitor the adoption of recommendations from a number of reports that the Council already authored since its inception in 2015, according to Swiecicki.

“More than half of them have not been implemented,” Swiecicki told the Kyiv Post in an interview. “We’ll be monitoring and encouraging government and the Verkhovna Rada to implement those recommendations.”

So far, the Council has saved businesses operating in Ukraine more than Hr 17 billion, or some $680 million, he said, citing numbers between 2015 and today.

And Ukraine is not unfamiliar territory for Swiecicki, who also served as a member of the negotiating team for Polish accession to the European Union. “It’s not my first encounter with Ukraine, it’s a sort of continuation of my previous interest in Ukrainian matters,” Swiecicki said.

The experienced economist and diplomat also used to work as a director at the Blue Ribbon Analytical and Advisory Centre in Kyiv between 2007 and 2011, advising the Ukrainian parliament on key economic policy issues.

Among the achievements made in that period, Swiecicki cites Ukraine’s entry into the World Trade Organization (WTO) in 2008 as a singular accomplishment.

Other initiatives on fighting corruption, implementing institutional reforms and a land market did not achieve the desired results due to difficulties and obstruction in parliament.

“It was not the case during… the government of Viktor Yuschenko (former president of Ukraine) and Yulia Tymoshenko (ex-prime minister),” said Swiecicki.

“I still remember appeals of Arseniy Yatseniuk (Verkhovna Rada speaker) that we should work together’. It was difficult to implement something, because one side was blocking the other,” he added.

Today, Swiecicki believes that Ukraine has a great chance to solve its biggest problems since there is unity between the president and the prime minister as well Servant of the People holds a majority in the Verhhovna Rada.

“I think now there is a much bigger chance to go forward,” he said.

Swiecicki’s biggest concern now is that fundamental laws are being passed too quickly. His advice is to work on certain legislation for at least a few weeks longer to avoid mistakes.

“It’s important to have the legislation from the very beginning as good as possible,” he said.

Forecasts and challenges

After looking through Council statistics on more than 6,000 claims filed by businesses, Swiecicki says that taxation remains the most troublesome area for the business community. But with a new team leading Ukraine’s government, he thinks a lot can change.

Swiecicki has already met with Ukraine’s new justice minister, as well as the chief of the state customs service and the chief of the fiscal service.

“There is a good beginning of dialogue and cooperation with the new leadership,” said Swiecicki. “I think they are full of plans and energy to solve problems addressed to them. I’m very happy if we can contribute to their efforts.”

He already thinks highly of Maksym Nefedov’s performance as head of the country’s customs service, where the number of customs offices has been reduced from 26 to 16.

“I think it can contribute to unification in customs practices that business will not feel that it’s treated unfair by one or another office,” he said.

According to Swiecicki, after Ukraine’s customs are unified, the interpretation of legislation and customs classification duties will be the same across the country.

Among other issues the new business ombudsman considers in urgent need of solutions are Ukraine’s lack of protection for property rights and raider attacks, when companies lose land or assets to rivals.

“The raidership is really against the security of business. That’s why investors are facing such a great risk and wondering whether to enter Ukraine or not,” he said.

What looks like savagery in Swiecicki’s native country is routine for Ukraine.

“Raidership is a term practically unknown in Poland. You must come to Ukraine to learn what it means,” he said.

It’s also a risk not only for foreigners, but local investors to operate in such a country.

“It’s a risky business to put their money and to be subjects of fraud or to have assets stolen,” said Swiecicki.

In addition, the Council already made some recommendations for reducing corruption, some of which have already introduced with others are still waiting.

“I hope new government is interested in improvement of the situation,” he said.

Swiecicki has been fighting corruption long enough to remember how it harmed the Polish economy in the 1990’s and how the creation of a central anti-corruption office cut corruption levels dramatically, with Poland passing some other EU countries.

According to Transparency International, Poland is currently ranked the 36th least corrupt nation while Ukraine stands at 120th of 175 countries.

Swiecicki also mentioned Singapore, which was once famous for incredible corruption and improved dramatically after the government took steps to fight it. “I believe that in Ukraine, efforts to restrict corruption can work,” said Swiecicki.

De-oligargization advocate

In Ukraine, a country where major industries are often divided between oligarchs, small and medium businesses (SMEs) still struggle for equal rights in regards to public procurement, fair judgment in the courts and access to credit.

It’s a system that hampers competition. “If oligarchs influence decisions, it doesn’t allow the economy to work well… They can influence legislation and tenders behind the curtain. This is unacceptable,” said Swiecicki. “I understand that big companies have their advantages, the economy of scale is important here.”

The monopoly of electricity producers in Ukraine, for example, blocks emerging, smaller suppliers. “It must be regulated in favor of small businesses who want to get access (to the electricity supply market),” said Swiecicki.

He feels Ukraine’s EU aspirations are within grasp, while advocating to accept all possible assistance from EU members in the meantime.

“The offer is here on the table and I think that Ukraine should use this assistance as much as it can,” Swiecicki said.

By Natalia Datskevych

Original article is available here.