Interview with Vincent Pringaut, Marie Bruant and Ihor Umanskyi (04.12.2018)

“Eurointegrators,” media expert and ex-Deputy Minister for Information Policy of Ukraine Tetiana Popova sits down with diplomats, heads of international organizations, and Ukrainian power brokers to discuss Ukraine’s European integration.

In this episode, the guests are Vincent Pringaut, adviser of the Economic Department of the French Embassy in Ukraine, Director of French-Ukrainian Chamber of Commerce Marie Bruant and former ex-Acting Finance Minister of Ukraine Ihor Umanskyi.

Popova: Hello, I present today a new episode of our program “Eurointegrators”, and our quests today are Vincent Pringaut, Adviser of the Economic Department of the French Embassy in Ukraine and Director of French-Ukrainian Chamber of Commerce Marie Bruant. In 2015 you announced and concentrated on reforms in Ukraine. What are the achievements and shortcomings of these reforms?

Pringaut: Yes, that is fully right. Actually after the events of 2014 we focused on Ukraine itself of world international community, including France, West, to support this great aim for reforms. And at that time, it was still unclear whether Ukraine could address all the challenges in all the economic sectors, in order to stabilize the economy and to grow again. And I think after few years – only three or four years – of reforms, which is a process which has started but has not ended of course, we are in the middle. But I think we can say that the results are very impressive. Some people tend to say that Ukraine has achieved more reforms in four years than since independence. I tend to agree with his assumption. And we can witness actual results in many sectors, such as the banking and financial sector, which has been stabilized, few numbers of banks reduced, with such banks we are now working very well and ensuring its supervision of the sector. We can witness results in the energy sector, which was a sector suffering from a lot of corruption and at the same time sectors starting to work much better now. We can witness that in plenty of further domains. Of course one could say it’s not so satisfactory enough, it’s too slow, and we could take this point of course.

Popova: Next question is too Marie. The French Chamber of Commerce represents French enterprises in Ukraine. In which directions are they working, and what is mission?

Bruant: Well, the French Chamber of Commerce in Ukraine is a business association, which is presented by French enterprises establish in Ukraine and working with Ukrainian market. Next year we will celebrate the 25th anniversary of presence in the Ukrainian market, and I could say that nevertheless the crisis in 2008, nevertheless the major crisis that enterprises faced after the revolution of dignity in 2014, 2015 and 2016, the French business community is never stop growing. So currently, we have 125 members of French enterprises mainly. Our missions are the classical missions of a Chamber of Commerce on this district. That means first to defend interest of French enterprises in Ukraine on so staying within the embassy, economic relations between Ukraine and France. Second is to help French business want to set up, to develop, to know business market in Ukraine. And the last one is more basic – it’s to animate French business community in Ukraine by organizing round tables, conferences, monitoring business news and organizing meetings with local authorities.

Popova: At recent Ukrainian-French economical commission, it was emphasized that the last year you had an 18% increase of export to Ukraine. And you are the fourth biggest investor into Ukraine. What is a balance of a trade between our countries?

Pringaut: Ukraine is benefiting a lot from the trade agreement signed with EU, which shows in about two or three years Ukraine has been able to grow its share, its rate with EU by about 20%. French companies very often tend to develop an activity on the territory and to look a nice on activity. And therefore we at the same time are important trade partner of Ukraine, but as well a very important economic partner within Ukraine, on the territory, maybe, you said, we are fourth or fifth investor, it depends how you exactly count. But yes, of course, major western investor, as Marie mentioned, we have very diversified profile of the companies in many sectors, we are, according to the official statistics, relates to one of the first international employer in Ukraine. The reason is that France is very prisoned in the banking, insurance and retail sectors, which hire a lot of people, and which have a facilities, agencies, shops all over the countries.

Popova: One more guest will join our interview now. It’s a former acting minister of finance of Ukraine Ihor Umanskyi. Hello Ihor, what could you add to this issue?

Umanskyi: France has always been one of our largest trade partners in Ukraine, if we look at our colleagues from the European Union. The French investment sector is quite significant, especially in a period of capitalization requirements of banks, where French banks participate in Ukraine. Meanwhile in my opinion, the most important issue is still the development of the real sector of the economy and the likelihood of using valuable opportunity in this exact sense. It’s no secret that during the crisis of 2007 and 2008 both the European central bank and individual countries employed special measures in Europe to support and boost their own economies. Particularly in France, there was the automotive industry. Meanwhile for now the state of relations and requirements that we currently have from our European colleagues on development in Ukraine, are more concerned with opening markets than with supporting the development of business in Ukraine, providing support and access to finance. Proceed is on this that we will focus attention in the near future. Especially in line of the fact that Ukraine’s economy for 2014 to 2015 has significantly reduced. We had two little economic base for today to compare growth.

Popova: Thank you for your answer. What do you see as difficulties for French companies in Ukraine? And what is the opportunity to improve the business climate for them?

Pringaut: You might be expecting that we might suffer from many difficulties – either corruption, either business climate. Actually yes, these are of course major consents, they have always been for international investors in Ukraine. We think that improving of business climate is extremely important not only for international investors, but for all the companies, including the course of Ukrainian companies, operate in Ukraine. This is a fight for the economy, and for the development of Ukraine. But I think, the movement of consents where the issue of work force, labor availability, because there is a lot of emigration from Ukraine, and this is of course a major consent. As you mentioned, France is the first international employer in Ukraine. Another consent is infrastructure, access to railway, and sometimes French investor companies have difficulties to find wagons, locomotives, to bring their materials, their products for imports and for exports. And if I mean the business climate, still of course, it is a consent, we tend to consider that the dialogue with Ukrainian administration accenting for central level in Kiev is very good. And there are agencies that have been created to help the work of international investors, such as UkraineInvest agency, which works very efficiently. When French companies have a problem, we have someone to talk to. We tend to observe some differences with this very positive approach of certain administrations, administries and sometimes the implementation in the regions, at regional level. And there, I think for the future of Ukraine it’s very important to ensure that the same policy of business climate isn’t short not only viewed from the Ministry from Kyiv, but everywhere in the regions. It is very important.

Umanskyi: I have to agree. There is no one system on one hand; on the other hand, as I understand it, this is an issue with investment by the court. In fact the issue of protection of our opportunities, more precise the protection of our investments, are assets with relevant almost 20 years ago. And as for me, the issue of protection is still the most important one that needs to be solved today. The issue of personal infrastructure is already something that we can solve. That is not at a business level, but at a state level and at a level of joint interstate programs. Moreover, as far as I know, there is a very remarkable European commission program for infrastructure development, but it still covers Poland, Romania and Bulgaria. Therefore, it would be great for Ukraine to join it. This is a program development of both railway transport and waterways. This idea is beginning to generate interest in Ukraine today, but still limited in availability of internal financing. It would be very good to get some support for Ukraine under this EU program.

Popova: Marie, what do you think about issues here?

Bruant: I would like just to add few principles on business climate and to support the fact that your main resource is a huge problem for company. And 2,5 years now we have regular meetings with committees of a French Chamber of Commerce and all companies, nevertheless the size of the company, or the location of the company, are facing human resource problems and have difficulties to recruit new talents and to keep talents. And in some parts of Ukraine, especially in the western part, for companies we have factories, shops or agencies with blue colors or forcer level of employees. It is critical. They have to never close to one under percent person sometimes, so they need to increase a wage, and they do it of course, because they are open companies and they want to propose their employees better conditions of work. But it’s not only once per year, but it could be twice, three times, four times per year, with double digits. So it’s a huge problem, and they have to anticipate law, and even with this anticipation they have to adapt their budget every semester.

Popova: May this mean that when we plan – I mean companies – when we plan salaries we should not plan average salary in Ukraine, but we should now look at an average between Ukraine and EU, or Eastern European and EU countries?

Bruant: I’m not sure that they are just looking at an average salary, because they monitor the increase of average salary very regularly, not once a year as it was done before, but every trimester or a quarter now. Because they have to adapt the market, they have to follow the inflation and to keep the best talents.

Popova: Ihor, maybe you want to add something else to our discussion about trade and economic relations with France?

Umanskyi: In terms of trade and economic relations, here again we have to focus on a very important issue for Ukraine. Because of the signing of the Association Agreement, the Free Trade Agreement, we have gained the opportunity for wider access to European and particularly French markets. Nevertheless, even at the moment of signing we said in Ukraine that this agreement are discriminatory towards Ukraine. They give our European partners the opportunity to get full access to Ukrainian markets, while meanwhile the capabilities of our companies are significantly limited. Many tenders that are held, including in France, are protected, and Ukrainian companies essentially cannot join them because of their Ukrainian origin. In this context, there is a possibility of changing this policy as a trade policy regarding changes in quotas for Ukraine, and procurement policy, which exists in the European Union and particularly in France. Removing restrictions on the access of Ukrainian enterprises to those tenders that exists in France would be very beneficial to a trade business relations.

Popova: Yes, but I heard that in some categories, and I think Ihor said in one of our previous program that quotas in some categories are taken during one month – like till the end of January, quotas are already finished for the products in the EU.

Pringaut:  That’s right, on most of the product categories there are known limits. On some product categories there are still some quotas, and it is true that for some agricultural products the quotas have been reached very fast. It does not mean that once they are reached, it is not possible any more to export them to EU, it’s possible, but then the taxes apply. There were always adaptations and ongoing negotiations between the EU commission and Ukraine to revise quotas, to adapt them. I think it’s something that cannot happen in one day, because we have in EU 21 member states with their economic interests, and there needs to be a balance. But globally I think that trade agreement is one of the most ambitious ever been signed between the EU and a partner country.

Popova: Ihor, would you like to add something?

Umanskyi: I understand the position of our fellow partners. Most importantly, this is really homework for Ukraine to address these issues not only at the level of communication and dialogue, but to actually deal with them at an official level. And I hope that our next government will certainly do that.

Popova: Thank you Ihor for joining our program. We know that in France you focus very strongly on gender equality issue. And there is even some commission, which checks the number of females in a top management of companies. Why do you do that and what is the reason to do that?

Bruant: France is very committed in gender equality with subsection gender law. In 2014 we had this law on equality between women and men, so enterprises, large companies with more than 50 employees should follow the rules, follow the legislation, and if not – they might have financial penalties. Second example your right 30 percent of boarders of directors in major companies should be women. This level should be reached by 2020. For large companies, if this level is not reached – financial penalties will occur. And more recently, French President Emmanuel Macron has made gender equality fundamental and national course for this term. What does it mean? It means lot of measures have been launched since then. I would just give you two examples. The first one is the establishment of a state secretary for women’s right, and the second one is annual barometer of feminization in enterprises. So, the monitor the feminization of board of directors, of highest positions in the largest French companies. That means they publish every year the list of the best companies for gender equality.

Popova: It also happen in the government, right?

Pringaut:  Yes. The constitution of the government is now based on a principle of gender equality and it’s reflected in the current constitution of the government. I see that you are able as well to comply with gender equality and parity principle on this stage today with Mary and me.

Popova: How is this situation with gender equality in French companies in Ukraine and in the French Chamber of Commerce?

Bruant: Well, among one 125 members we have only 25 women – General Directors or founder of their own business. So 20 percent, it seems week, but this percent is constantly growing since the beginning of the Chamber of Commerce. Step by step, it’s growing. And we have women, General Directors or founders of the commodity of all sectors of activities, from small and medium enterprises to the largest worldwide companies. I would just give you two examples. The largest employer in Ukraine – “Auchan”, its General Director is a woman, Ukrainian Viktoria Lutsenko. The second example – “Danone”, a worldwide dairy company, with two big factories in Ukraine, so its General Director is a woman, a French one this time, Nathalie Alquier. We have not so many general directors, but the number growing, and they are also at the head of the biggest companies in Ukraine. And the second thing is that French companies in Ukraine are supporting gender equality by promoting more woman in size of company as the highest positions. For example, in “Crédit Agricole bank’, the two Deputy Chairmen, but I should say two Deputy Chairwomen, because they are women in positions of co-business of the company. So, we have large diversity of profiles of women with highest positions, and these women reflect diversity of talents and reflect our companies recognize the competence in Ukraine.

Popova: And I heard that you had launched a special competition for supporting businesswomen.

Bruant: Yes, you are right. It’s a revenue project. We launched this contest for the first time this year. The main idea is to promote entrepreneurship in Ukraine and to transmit the passion for the entrepreneurship, the passion for leading projects or leading teams to female entrepreneurs and to inspire the young generation of entrepreneurs in Ukraine, to show them that there are a lot of women before them, who have launched  the business and with success. So, with the businesswomen committee of the Chamber we launched last March, we decided to create a contest for a women who has funded her own enterprises. So concretely, the contest is for women whatever the sector of activity with no age limits. We will select the winner with a professional jury and we will award her in March 2019. Her Excellency Mrs. Isabelle Dumont French Ambassador in Ukraine accepted to join the jury and to be the honored president of the jury.  Will participate into the jury too Iryna Suslova, a Member of Parliament in charges of sub-commission on gender equality, general directors of top companies, such as “Mazars”, “Auchan”, “Crédit Agricole”, “Danone” and also we have the support of Sonia Zabuga, Chief Editor of “Elle” and “Elle Decorations”, she will join the jury too. So, as you can see we have a large professional jury, and with the large diversity of profiles.

Popova: As far as I understand, it’s an adaptation of the program, which has been already launched by other French Chambers in other countries.

Bruant: Yes, they were not in all the French Chambers of Commerce (we have 21 or 22 Chambers of Commerce worldwide), but some of them have launched this program, with a contest. And they have once a year a woman, not only a female entrepreneur, it could just be a General Director, but just to promote female talents in all spheres of the activities.

Popova: By the way, what is the price for this contest?

Bruant: Well, with French partner companies, we will monitor the project, monitor the business and follow up the business plan during couple of years in different spheres – financial, audit, communication, marketing, and of cause will add one-week trip to Paris, including meeting with Headquarters of French companies.

Popova: What is the implication of martial law for French companies here and for Ukrainian-French trade relationships?

Bruant: As far as I know, for the moment there is no direct impact on French businesses, we have small informing one discussion this morning at the Chamber. There were not all the companies, but few of them said there is no direct impact. They concern of their employees, but there is no direct impact. Maybe the first day, because there were more cash withdrawal. But it was just one day, and now we are about normal.

Pringaut: I can confirm what Marie said. We don’t see any precise measurable impact on the activity of our companies in Ukraine, including in the regions, were we concern of the martial law. What we get the most is questions, what could happen. And most of the questions come from French companies that are not yet active in Ukraine but are intended in developing projects. It’s normal. It’s absolutely normal that these questions are being asked. And we answer what can lead to these questions, we say what is the reality as measured thanks to a French Chamber on the ground. Yes, of course, there is a geopolitical context in Ukraine, and France is a supporter of reforms and of the integrity of Ukraine. And I think the companies tend to understand quite precisely the situation. And there is no panic at all. It was a decision of Ukraine authorities and this decision – I’m not talking about all spheres, I’m talking about business – there is no measurable impact on business.

Popova: I know that some Chamber even published on their websites and social networks like “Business as usual”

Bruant: Yes, business as usual, we said that we receive more questions from the headquarters in France. In Ukraine, there is no specific concern. Of course, we monitor the situation, but as far as I know, there is no direct impact.

Popova: Thank you Vincent, thank you Marie for joining our program. Thanks to all who watched us, see you next week.

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