ExecutiveChronicles| Vadym Novynskyi and the Industrial Revival of Ukraine | To reverse the economic wreckage caused by the biggest war in Europe since World War II, Ukraine’s government has its hopes pinned on the entrepreneurial spirit of successful entrepreneurs like Vadym Novynskyi.
Novynskyi is the owner of Smart Holding Group, one of the largest investment groups in Ukraine, made up of companies that share common strategic goals and business principles. It focuses on industries important to the country’s economy, including metals and mining, oil and gas, agriculture, shipbuilding, and real estate.
It’s been one year since the Russian Federation launched its invasion of Ukraine. Despite many recent wins for Ukraine on the battlefield, experts reckon that the war could rage on for a long time, leaving millions of civilians displaced.
But none of that has dampened the indomitable Ukrainian spirit — and that includes Novynskyi and his enterprises.
“We believe in Ukraine and are making our contribution to the victory and recovery of the economy,” said SHG CEO Julia Kiryanova.
Steadying Ukraine’s Economy
At the same time as Ukraine’s soldiers fight to regain territory, officials in Kyiv are racing to steady the economy and find employment opportunities for those who fled homes, jobs, and businesses in the east and south.
Ukraine’s economic growth declined by more than 30% in 2022, but with many businesses reopening, Economy Minister Yulia Svyrydenko anticipates output stabilizing and growing by as much as 15% in 2023. Indeed, she’s optimistic that in the next decade, help from foreign investments will push growth to more than double prewar levels to reach $500 billion.
“We always say that we have two fronts: One is the military one and the other one is the economic front,” Svyrydenko told Reuters in a recent interview. “The economic one is not less important than the military one.”
The Country’s Industrial Revival
Although the country’s economy has suffered heavily, particularly in the industrial sector where prewar Ukraine was a world leader in areas such as metals and mining, business professionals like Vadym Novynskyi say that the country will see an economic revival after it reigns victorious over Russian invaders.
“The war significantly affected the investment attractiveness of Ukrainian assets and today they are undervalued. However, we firmly believe in the victory of Ukraine and its economic revival. Ukraine has a huge resource potential, which should give our country a powerful economic impetus toward industrialization of the 21st century,” said Kiryanova.
Novynskyi expects that Smart Holding, through its major assets like Metinvest Group, will contribute to the development of the economy in the restoration of the metallurgical industry and its renewal in accordance with decarbonization.
Investments in Ukraine Are Needed
Although Vadym Novynskyi anticipates that investments will naturally begin to flow into a postwar Ukraine and help to kick-start the economy, he’s also a realist. So is Smart Holding CEO Kiryanova, who says that there are some prerequisites for said investments. She highlights ensuring the rule of law, the inviolability of property rights, and zero tolerance for corruption as just a few examples.
At the Kyiv International Economic Forum, Kiryanova pointed out that incentive measures will be needed, and these should be led by the government, including the development of target investment funds, a state mortgage program, an energy-efficiency fund, free trade opportunities, tax incentives, and sectoral programs to support industries. “All this will become a backbone and a ground to which foreign investors can be invited through the joint efforts of the government and businesses,” Kiryanova wrote in an op-ed.
“Let us start with the fact that the Ukrainian economy as a whole and its industrial sector, in particular, have survived and persevered. The economy has suffered significant losses due to the war, but continues to function and contribute to the economic front in the fight against the Russian aggressor.”