Sweden has always been a strong partner and supporter of Ukraine. Today, we are committed to reciprocating and making our commercial, historic and social ties even more solid. While Swedish-Ukrainian cooperation dates back centuries, all the way to the Kyivan Rus, the modern era of bilateral relations started shortly after Ukraine’s independence in 1991, with Sweden being the first Nordic country to recognise the newly-formed state. This spirit of alliance has persisted throughout the centuries and has resulted in the dynamic cooperation between our governments, businesses and peoples that we enjoy today. Sweden is Ukraine’s largest trade and economic partner in northern Europe, as well as a strong advocate for Ukraine’s European integration.
Our bilateral cooperation has particularly gained momentum in the recent years. Between 2009 and 2013, Sweden provided EUR 25 million annually as part of its cooperation policy and granted Ukraine an extension of technical assistance covering 2014-2020 with yet another EUR 25 million per year. The goal of this development cooperation is to deepen democratic transformations related to European integration, as well as to enhance energy efficiency and environmental protection in Ukraine. Furthermore, there is a growing demand for greater cultural cooperation. With the support of the Swedish government, many Ukrainian students and young professionals obtain their degrees in Swedish universities, embedding themselves fully into Nordic society. Three years ago, the Swedes and Ukrainians had a chance to meet during the Euro 2012, co-hosted by Ukraine and Poland. Thirty thousand Swedish football fans represented their country during the event, while Ukrainians were happy to host their friends from abroad.
Reformist government is reliable partner for Sweden
Ukraine’s current government is, first and foremost, a new, strong, and agile team of professionals. We have come to our ministerial positions from private sector jobs and are dedicated to introducing the necessary reforms as we are well aware of the hurdles facing the average business. Our strong desire to introduce economic change primarily falls under two key areas: macroeconomic stabilisation and deep and structural economic reforms. While the Ministry of Finance and the National Bank are focusing on macrofinancial stability, my own responsibility is to create an environment in which businesses will thrive, so that the country returns to economic growth in 2016. At the Ministry, we are working hard to reduce the unnecessary burdens on businesses by removing excessive and ineffective regulation, cutting red tape, and introducing transparency into government agencies. A simple removal of the quarantine certificate for agricultural goods brought up to UAH one billion back into the sector, while abolishing an ineffective drilling monitoring returned up to UAH three billion to companies in this area.
In order to fight corruption, the Ministry of Economic Development and Trade of Ukraine is implementing a public procurement reform that aims at transferring all procurement tenders online. Having started a pilot project in e-procurement earlier this year, savings on contracts from tenders held online have reached 10%-30%, while introducing an impeccably transparent procedure. Within the system currently being tested, every tender is accessible online to every citizen at every stage, drastically decreasing corruption risks for our annual public procurement market of UAH 250 billion. Introducing transparency at every step, removing intermediaries - such as with natural gas imports - and leveling the playing field among businesses constitute our drive towards a healthy and truly free market environment, where investors can safely bring their capital. Ukraine is a country of great untapped potential with close proximity to European transport hubs, a highly-skilled workforce, and rich soil. Now that Ukraine and the EU are introducing the Deep and Comprehensive Free Trade Area, Ukraine is becoming a worthwhile destination for establishing business operations. For Ukrainian products to flow freely to the EU and vice versa, the Ministry is adapting Ukraine’s technical standards to those of the EU, and removing other barriers to trade.
Swedish-Ukrainian ties: best is yet to come
Swedish companies were among the first investors in Ukraine. However, with the potential both countries have in reserve, even more rewarding partnerships can be developed. As of today, one of the most successful Swedish companies in Ukraine is the food processing company Chumak. Founded in 1996 by two young Swedish entrepreneurs with financial support of Hans Rausing of Tetra Pak, it became one of the largest food producers on the Ukrainian market. Another promising domain of bilateral cooperation is the energy sector, especially in the areas of energy efficiency and energy conservation, where Sweden is an undisputed world leader (26% of Swedish domestic energy needs are met by renewable sources). Waste management presents substantial opportunities for cooperation, as Ukraine could build on the vast experience and leading technologies of Swedish companies, following the waste management market’s demonopolisation in spring 2015.
Other potential areas of collaboration include telecommunications, energy-saving and environmental protection, nuclear safety, and more. Notably, the first ever meeting of the Ukrainian-Swedish working group on energy issues will take place this year. Sweden and Ukraine have strong historic ties, while its long history of mutual respect, cooperation and support clearly sets Sweden apart as a reliable partner, and even more importantly, as a friend. With our new path of reform and modernisation, and our efforts focused on combatting corruption and improving the business climate, one can be sure that Sweden-Ukraine relations will accelerate and bring further tangible results in the coming years.
About the author: Aivaras Abromavicius is the Minister of Economic Development and Trade of Ukraine