Ukraine's banks spot an opportunity
Politicians have promised that reform is on the way. International investors are apparently ready to step in if the conflict calms. But will it be in time to rescue an economy bedevilled by fighting, corruption and currency shortages? Banks are struggling to survive, hamstrung by lack of funding and capital. On the eve of parliamentary elections, Euromoney visited Kiev to canvass the views of policymakers, bankers and international sponsors. Is there light at the end of the tunnel?
The infrastructure of revolution has long since been cleared away from the centre of Kiev by the time of Euromoney’s visit in late September, but the spirit of Maidan is still very much alive. Despite a simmering war in the east and an appallingly bleak economic outlook, the consensus among the city’s business and banking community still seems to be that almost any outcome would be an improvement on the latter days of ousted president Viktor Yanukovych. “Yanukovych lost his head and applied a gangster mentality to the highest echelons of power,” says Peter Bobrinsky, a managing director at local investment bank Dragon Capital. “That was the absolute zero of politics. I can’t envisage anything worse than that, except maybe Mobutu or North Korea.”
Deputy finance minister Vitaly Lisovenko puts it more succinctly still: “Ukraine had reached a point of no return.”
Everyone has their favourite example of jaw-droppingly blatant corruption from the Yanukovych era. The company whose accounts were so clean the only excuse tax officials could find for levying the obligatory hefty fine was that broken light bulbs had not been listed as assets. The blind official eye turned to the numerous ‘conversion centre’ networks, whereby firms could ‘convert’ fictitious and tax-deductible contracts into cash with which to pay workers off the books.