Ukraine Can Show That It Is Serious About Corruption – Andy Hunder
Bohdan Nahaylo speaks to Andy Hunder how Ukraine and the business environment look from his viewpoint as President of the American Chamber of Commerce
Hello and welcome to this week’s episode of Ukraine Calling. I’m Oksana Smerechuk for Hromadske Radio in Kyiv. Here you can listen to our feature interview hosted by Bohdan Nahaylo, followed by some new music from Ukraine. Bohdan talks with Andy Hunder, the immigrant boy from London, whose country once didn’t exist on a map, and is now President of the American Chamber of Commerce in Kyiv.
Feature Interview: Bohdan Nahaylo speaks to Andy Hunder on how Ukraine and its business environment look from his viewpoint, having lived in Ukraine for twenty years, and as President of the American Chamber of Commerce.
Nahaylo: I am very pleased to have as my guest on this week’s Ukraine Calling program Andy Hunder, who, as he’ll tell us himself, is originally from Britain but he is the President of the American Chamber of Commerce in Kyiv. Welcome to the program!
Hunder: Thank you, Bohdane! It’s always nice to see you. And Happy New Year!
Nahaylo: Thank you! Z Novym Rokom! Let’s begin by introducing the American Chamber of Commerce to those who are in the States or Canada or elsewhere. What is the role of such Chambers, not just in Ukraine, but generally?
Hunder: The American Chamber of Commerce in Ukraine was launched 25 years ago, in 1992, the year when embassies started to open up in Kyiv after the collapse of the Soviet Union in 1991 and the Referendum in December. So in 1992, the embassies opened up and big business started to turning up and opening offices Ukraine. And the companies got together and create the Chamber of Commerce that unites them. And that is what we have been actually doing for the last 25 years. We do three things. Number one is the B to G, being the voice of business to government. It’s getting the voice across to decision makers, to the opinion leaders. And how do we do that? Starting from the very top with the Presidential Administration – I am a member of the National Reforms Council. I am sat at the table with the President, Prime Minister , Cabinet of Ministers and I am getting the voice of business across. Why the American Chamber of Commerce? Because over the last quarter of a century the Chamber has established itself as credible and an unbiased voice. So we are not lobbying any one individual, company, or sector.
Nahaylo: Andriyu, before we move on, give us an idea of the size of the Chamber? How many companies do you have? How many roughly did you start with? How have you grown over the years?
Hunder: We have grown significantly over the last 25years. Today we have 600members and affiliated parties. This is a substantial organization and we bench-mark with our colleagues across Europe. My predecessors, with the support of the US Embassy and of all members, that believed in Ukraine 25 years ago, and have been here ever since and continued to invest in creating jobs and paying taxes.
Nahaylo: So you have banks represented, IT companies, I presume, more and more…
Hunder: Agriculture, banks, health care, IT, all across the board. Law firms, consulting firms, the big investors. Food and Beverage is a big industry. Automobile industry. We have a new committee now that focuses purely on aerospace and technology. Some of these non-specific sectors or non-traditional sectors that we see interest in now.
Nahaylo: Who are the other big players as far as the Chamber is concerned? The Brits, I suppose. The French? The Italians?
Hunder: Often people ask why are the Brits are running the American Chamber of Commerce in Ukraine? And the answer is simple: because we have an American running the British Chamber of Commerce. But we are quite an eclectic mix. So we have a percentage that is American but we also have the large European and Ukrainian companies. I think, on the market there are the traditional organizations. There is the local Ukrainian Business Associations, the Ukrainian Chamber of Commerce. We have some of the traditional business organizations that have been around, like the Union of Industrial Entrepreneurs. We have the Ukrainian Business Association as a new Union of Ukrainian Entrepreneurs. And then we have all the other countries. We have the European Business Associations: The French Chamber of Commerce…
Nahaylo: Who are the other big players?
Hunder: The biggest players are probably we and our European counterparts. It’s not about the size, it’s about credibility. And also having the clout to deliver for your members. We have been here the longest. That’s 25 years. Together with our European colleagues, we try to work together promoting and making Ukraine a better and easier place to do business.
Nahaylo: We will talk about the environment and conditions for doing business and investing in Ukraine. But let’s pause to talk a little bit about yourself. You’ve mentioned you are from Britain originally and, like myself, you grew up in the Ukrainian community there. Tell us about your education and how did you end up in Ukraine?
Hunder: As you say I was born in London, in the UK. When I was 8, I used to go to school and was a son of immigrant parents. The teacher called us out to the blackboard and there were two maps. There was a map of the UK and a map of the world. One day the teacher said, “OK, children. Today we are going to do Geography. And I would like you to show us which part of the UK your parents are originally from.” Most children went to the map and said my parents were from Liverpool or from Manchester. And I, like the other children of immigrants, went to the map of the world. And I proudly stood there and said, “My parents are from a country called Ukraine.” I looked at the map and the country was not there. So the children ended up ridiculing me saying, “You come from a country that is not on the map.” I tried to convince them, almost with tears in my eyes: “No, that country is there. My parents come from Ukraine!” But they said again that “The country is not on the map!”
Nahaylo: At least you had a name like Hunder which was not that difficult to pronounce! With me, it was Nahajlo with a J. So it was “Nahadgelo” for everybody.
Hunder: But I think it just shows how things have evolved over the last quarter of a century. No one from my former classmates or my teacher would struggle in finding Ukraine on the map today. An independent state. Biggest country in Europe. So my roots were there.
Nahaylo: I know you are fluent in Ukrainian. Obviously. It’s very important for you to liaise with the government, and local business community, etc. Is that simply from the Ukrainian Saturday schools?
Hunder: It was my parents and Saturday schools. When I was 13, I made a decision to go to Rome and study in the Minor Seminary. It was the Ukrainian Minor Seminary at that time in Rome. Today I see it as one of the best decisions of my life. I loved it. I was there for 10years. I was in the Minor Seminary, then I went to the University, and I did Philosophy and Theology. So I have many friends who went on to the priesthood. Some of my friends have gone on to become bishops. It is something that I still feel very close to in my heart. It’s an amazing organization. And what the Ukrainian Catholic Church has done. Still quite close with the Ukrainian Catholic University.
Nahaylo: So it gave you your patriotism and a kind of moral ethical backbone?
Hunder: It gave me a lot of the contacts also. Roots and contacts. Already when I was in Rome we had people coming over from Ukraine. There was once a TV crew which came over and I managed to get them to interview the Holy Father, John Paul II. And I kept those contacts. So one day one of the TV crews called me back in London and said “We’re launching a TV program in Ukraine. We need somebody who speaks a bit of English. Come over to Kyiv. We need somebody to help in producing it.” So I packed my bags, at the age of 25 at that time, and I came to Kyiv. It was in 1996 and I pretty much stayed ever since. That is where I started. Then I launched a public relations department at the largest mobile telephone enterprise in Ukraine, which is now Vodafone in Ukraine. I met my wife and got married. We settled down, we had a family here. So sort of on and off, we have been in Ukraine now for nearly two decades.
Nahaylo: And your parents, I presume that at that time were alive? I do not know if they still are, but they must be quite happy that their son has returned to his homeland.
Hunder: Absolutely. When we were growing up, we had this dream of seeing Ukraine. Because of the Iron Curtain we couldn’t travel. The possibility to travel just wasn’t there. So I grew up with this dream of one day visiting and living in Ukraine. In 1991, when Ukraine became independent, this became a reality. When I had the opportunity in 1996, I took it and have not looked back since.
Nahaylo: But during those years—1996 to 2018—you must have, like all of us, experienced ups and downs and peaks of satisfaction that things were beginning to go the right way, and yet moments of disappointment. So in those years looking back at say, the last 20 years, what were the most memorable years for you personally?
Hunder: I think it’s been a bit of a turbulent ride. The seat-belts are still on. I think the moments of euphoria… I remember 2004 and the Orange Revolution and that’s something I will probably remember for the rest of my life. My son still remembers that, and his love of politics is because of what he lived through during the Orange Revolution in 2004 in Ukraine. I think the Maidan is something that will always be with us in our hearts and in our minds. But also we see on a daily basis, just living in the country and it’s the reality of living and for the business community doing business here.
Nahaylo: Well you deal with investments, but clearly your parents invested in your future and your education by sending you to Rome and, if I can betray a secret, your son is one of the few Ukrainians who has been educated in Eton. Correct?
Hunder: Yes, he finished. He was there for 5 years and has gone off to university now. I’m very grateful to my parents for giving me a sense of understanding of my roots. Where we stem from and our roots. And I think that without a past there is no future. And I’m very, very happy to have had the opportunity to have my dream to actually live in Ukraine materialize.
Nahaylo: Andy, before we focus on the present situation and the work of the Chamber again, you were also for some time the Director of the Ukrainian Institute in London. What did that involve?
Hunder: Well, this was Bishop Borys Gudziak in 2010. He asked me to take over the Institute because the Director at the time, Marta Jenkala, moved over to Cambridge University. And I took it over on a pro-bono basis. This is a wonderful building in Holland Park, one of the most prestigious boroughs of London. And it was bought in 1979 by Patriarch Josyf Slipyj and is an affiliate of the Ukrainian Catholic University. Bishop Borys asked me to take over the Institute, and it was a primal focus point of all things Ukrainian in London. There was Professor Tsymbalisty, who was the first Director, then Marta Jenkala, then I came on board after Marta. And it was to bring Ukrainian culture and literature together: and there was a literary club, a book club.
And then in 2013 and 2014, I was spending a lot of time in London with my family, and there was no Ukrainian voice in English that was getting Ukraine’s message across. So at its peak [Maidan] in February 2014, I was asked to do 7 live interviews in one day on TV channels like CNN, BBC, Sky, Al-Jazeera. This was an opportunity to get Ukraine’s voice across in English, for the international media to understand what was going on.
Nahaylo: And you did a very good job. I saw quite a few of those interviews and I was very proud we had such a capable spokesperson then. So now moving back to Ukraine, let’s talk a little bit about the climate. There were great hopes, that after the Revolution of Dignity, after the ouster of the former President and the cleaning of the stables, as it were, from the corruption that existed, that we would have much more auspicious conditions for investments and for attracting business from abroad. Certainly there has been progress. You’ve just written a piece in one of the business publications here looking at prospects and taking stock of the situation. Would you care to just summarize how you see the lay of the land at the beginning of 2018, bearing in mind the challenges, where we’ve come from, and looking ahead?
Hunder: Sure. If you look at the big picture — over 25 years — I think, what we have in 2017-2018 is probably the most open and accessible government that the business community has had in the last quarter of a century. What has changed? The people have changed and technology has changed. I can write to many ministers on Facebook and usually within 60 minutes get a response. So I think the technology also helps that. The ministers and government officials are much more accessible and much more open. They are ready to listen. Sometimes they hear, and that is a great change and we’re very grateful to the government for this major shift. And it is almost a tectonic shift in the way that they communicate with the business community. Some things haven’t changed.
Nahaylo: Can I ask you a question: the President is a businessman. The fact that he’s a businessman, has it made it easier to do business with a businessman or not?
Hunder: Well we’ve seen some very tangible examples. One of the biggest issues the business community, the exporters and mainly the grain traders, have had over the last 20 years, is to refund the value-added tax on exports of grain, sunflower, wheat, whatever. And on the 1st of April, President Poroshenko signed a new decree, whereby all value-added tax returns were done online in a transparent and systemic way. So that was very tangible and that was one of the biggest, positive steps forward for the business community in Ukraine. We also have regular meetings with the business community, with the President, and with the Prime Minister. During one of these meetings I said to the President, “Mr. President, Mr. Prime Minister, the worst possible image for any businessman, any shareholder, any investor, any employee, is when you have men in balaclavas and Kalashnikovs sent in as law-enforcement agents, knocking down the door of your office, looking for a piece of paper from the tax office. That is the worst possible way to scare investors off.”
And after these meetings the President and the Prime Minister heard us, and they signed a law stopping these raids on business with men in masks and Kalashnikovs. So things are changing. Still, we do regular surveys of the business community to understand the businesses that are working here everyday and what they encounter…corruption is still the issue.
Nahaylo: Corruption and the delays in reforming the legal system, to ensure that not only the checks and balances are there, but that due process is observed.
Hunder: Absolutely. I mean we had a very strong statement from the International Monetary Fund yesterday about the Anti-corruption Court. And then it’s important to have the Anti-corruption Court in place which will resolve this cancer that is still killing the country. And I think in the words of Rex Tillerson, when he said last year, “There’s no point for Ukraine to fight for its body in Donbas, if it loses its soul to corruption.” And I think that’s something we saw from Joe Biden in his latest book, Promise Me, Dad. Three times he mentions how personally involved he was in working with President Poroshenko and Prime Minister, Yatseniuk at the time, in terms of fighting corruption. But this is still a cancer that’s still there and that is still being created.
Nahaylo: Is it merely a cancer, or do you feel there is still this very strong opposition from the oligarchic set of vested interests that are being defended?
Hunder: Well the vested interests are there, absolutely. I think we are seeing this clash between the old and the new. New, genuine people that have given up good jobs in the private sector and gone into government with the dream to change the country for their children to live in a better land: a land that’s free, where they can be educated, where they can work, and they can live here. But then we still see that old habits die hard. And there are still interests that don’t want to change the system because they don’t know how to make a living working in a free, competitive environment. They are used to the old ways where you have access to power and that means you have access to the cash.
Nahaylo: Looking ahead, what are your main objectives and the Chamber’s main objectives for the coming year? What areas are you going to be focusing on?
Hunder: Well, we have very specific areas. I think, for the business community, reducing the levels of corruption is still something that remains top of the list. The legislative framework, that’s what the investors want to see, in terms of investor protection rights. So if you own land on which you build a factory, or an office centre, or anything, you want to be sure that in court you can prove that land is yours. This year is quite specific – why? – because this is a pre-election year, and we are already seeing a lot of the focus is going to be on the elections in 2019. In first the quarter Presidential elections and fourth quarter Parliamentary elections.
Nahaylo: I think the manoeuvring started even last year?
Hunder: It has, yes.
Nahaylo: Tell me, does the Chamber have a policy on privatization of the land?
Hunder: We have a position on privatization per-se. I think, in terms of state enterprises, there are 3,500 state-owned enterprises in Ukraine today. In terms of it having a privatization that is transparent, three-fold transparent: transparency of the assets that are being sold or put up for sale, so understanding how toxic it may or may not be; a transparency of the process, so who is being allowed into the data room and for what reasons. Are they there just to mess the whole thing up; and thirdly, a transparency of the buyer. Is it an off-shore company from Cyprus or BBI which is owned by Mr. X who everybody knows? On privatization, absolutely, it is one of our priorities for state-owned enterprises.
Nahaylo: The change in the Presidential Administration of the United States was a big story, still is a big story, and of course, there were fears here about how that would impact politically. Particularly, as far as support for Ukraine in the war that Russia has launched here. But in terms of business and the business climate, is there more of the same? Are there people investing? Are they coming here or has the change in administration in Washington in any way affected the American companies’ willingness to come here?
Hunder: I remember the morning the day after the elections. This was like 6 — 7 o’clock in the morning here, in America House, and we all got together and we saw the results. And I think there was surprise. We were not expecting what would the Trump administration bring. I think what we have seen, especially when Trump met with President Poroshenko, the last meeting, the one thing he said was that business is coming to Ukraine. These are Trump’s words. And he said to Poroshenko, “Take good care of them.”
So I see from my schedule, that even in January we have numerous companies looking – they are flying in, they are flying in from the US, they are flying from their regional headquarters in Europe, and they are looking. I think we are still at that stage. We are not signing contracts and drinking champagne yet, but I think it is a good stage where we are looking. It is a very important stage to be at. As I mentioned in the article, it is no good Ukraine promoting or trying to promote all kinds of investments, showing investments promotion materials, without really being serious about fighting corruption. So now I think that is really the crux of the issue. Ukraine can show that it is serious about corruption and I think that is what investors do want to see.
Nahaylo: Okay, and finally because we are running out of time. Two things: if there was something that could be achieved this year with the help of your Chamber, what would that be? That you would be very pleased about, within the realm of a tangible, that is realistic?
Hunder: Well, we have a long list. Starting from the International Monetary Fund cooperation continuation, which I think is essential, repatriation of dividends, privatization. But I think the Anticorruption Court is extremely important. Because that would send a signal that Ukraine is serious about fighting corruption.
Nahaylo: Is there a message that you would like pass on to listeners, people in the business sector listening out there, who perhaps are hesitant to come and invest because there is a war going on, and they don’t always read good press about Ukraine. What would your message be?
Hunder: Well, I have been here on and off for two decades. And it is country that I absolutely love and I think I have seen so many great stories happening here, great opportunities. I think it is very different, when you sit in the US or in Europe looking at Ukraine through a TV monitor on TV station. When we see that people do come here, and they come in our office on the 15th floor with the nice view and say “Wow, it is a very different Ukraine I imagined sitting back at my home or my office.” So I would say, come to Ukraine, have a look and you will be surprised.
Nahaylo: Thank you very much. I have been speaking to the President of the American Chamber of Commerce here in Ukraine, Andrew Hunder. Thank you very much for joining us.