How to build a new ecosystem of ukrainian business

Mykola Siutkin, founder and CEO of S&P Investment Risk Management Agency. Published specially for Novoye Vremia.

About how, having begun with oneself, the Ukrainian business can change the country.More than 20 years, modern Ukrainian business lives and plays by the rules that formed long before him. How did the corruption begin? Previously, businessmen had a demand for a prompt solution of a particular issue. Accordingly, they persuaded officials to make minor violations or so-called “concessions”. The official agreed – the issue was resolved. Gradually, the requirements of business began to move into the category of “I want to get it today”, as a consequence – the rates of officials began to rise. After a while it was practically impossible to build the relationship between the entrepreneur and the government without the corruption component: the business began to receive “put up prices”, and the bureaucracy turned into a commercial structure that dictates to the businessman how much he should pay and for what. The most interesting thing is that the business pays. Such a system of relations between the state and business has become the norm for Ukraine. What started earlier, as an entrepreneur’s desire to thank an official for a good deal, is now perceived as a guaranteed payment “at the top”.

The business that laid the groundwork for these rules 20 years ago is gone now, but the rules have remained. And when a new businessman or a new official comes, he begins to “play” according to these established rules. The amazing Ukrainian paradox – those who created the system, no longer exist, but the system continues to work.

Two pictures of one world

If we try to analyze the essence of Ukrainian business, we will face two pictures of the world. The first one is the usual complaints about a bad state, corruption, imperfect legislation and a heavy dialogue with the authorities. Companies that were founded many years ago under completely different circumstances, when Ukraine was just beginning its development, continue to live in the old system of coordinates. They conduct business according to the usual rules in the usual corrupt world, where one side continues to give bribes, and another – out of habit, requires them and takes them, because they do not even know that it could be in different way.

Fortunately, along with this there is another picture of the world in which everything is working slowly but surely – non-ideal legislation is used within its capabilities, corruption is absent because the business refuses to play by illegal rules. This is a completely different ecosystem of a completely different mental and behavioral level of businessmen, which appear in Ukraine more and more: both among local investors and foreign ones.

Tools are the same – the results are completely different

I will give an example. The foreign company addressed us with the task of developing a legal formula using the mechanisms of the current legislation of Ukraine to recover more than 300-million-hryvnia VAT in the shortest possible time. In three weeks the task was completed, the client received the full amount of the refund on the account. In practice, we have shown that, acting only within the legal framework and using the mechanisms that Ukrainian legislation provides to date, it is possible to obtain the maximum result in the minimum period. And I will emphasize all this once again, applying the legal system, which, according to the majority, does not work in our country. The question is who tried it?

Together with our clients we help to form a new “non-toxic” essence of Ukrainian business in Ukraine. If in a nutshell, then, using the same tools, we are building an entirely different eco-friendly world. It is important to say that this is exclusively a matter of choice – business itself determines for itself in which system to exist. It is necessary to have the courage to make a decision to get out of the habitual way of life, stop playing according to the established rules and create a request that the company really wants to move from the familiar corrupt world to a new eco-system.

In the stormy mountain river of Ukrainian

business This applies to Ukrainian companies. But there is another category of companies – foreign investors, for whom such an eco-friendly world is absolutely customary. They come to Ukraine, not suspecting that there is a certain system in which they have to “pay”. And believe me, they want to build the same eco-friendly world for themselves here in Ukraine. For our part, we show in practice that in our country such a “non-toxic” ecosystem can also exist, as in any other country.

At all times there were pioneers, brave souls who opened new routes, first rushed into the boat, took oars to cope with the violent power before others, rafting along the rugged mountain river. Can you imagine how they got high? In business just as well. Ukraine is a huge territory with great potential and opportunities. Foreign companies from among the pioneers come to Ukraine, even despite corruption, non-ideal legislation and a heavy dialogue with the authorities. In addition to the fact that such companies predict demand in time and are not afraid to take risks, they also enjoy what they are doing in our country. It is comparable with the emotions of a beginner who descends into a mountain water stream, gaining incredible emotions, although this is dangerous.

However, history says that most part of newcomers without special “preparation” and relying only on luck – have failed. I am convinced that in order to avoid this, you need an instructor-conductor who will point out the risks, warn, direct, consult. For example, as a local rafting instructor who teaches a beginner, indicating how to swim to stay whole and have euphoria from the process of descent. Translating into the language of business – in order to increase the likelihood of successfully passing this turbulent mountain river called “business in Ukraine” you need to know it well. Having an idea of all the “local features”, an experienced conductor and courage, one can not only enter a new emerging market, take root there and make profit, but in parallel change the ecosystem of the country of its presence. And this is the best profit.

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Name: Mykola

Surname: Siutkin


Phone: +380443830000

Company address: 10 Redutnaya Street, Kyiv, Ukraine

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