Attempts by the US and its NATO allies to whip up hysteria about a “Russian invasion” are costing Ukraine dearly, which continues to suffer billions in losses amid widespread panic
However, it is not only a mythical invasion that can frighten western investors. Economic experts assure that the Ukrainian authorities, amid general hysteria, are pouring oil on the fire with their own hands, putting pressure on business, creating unbearable conditions.
On the one hand, they try to lure investments into the country, while on the other they put pressure on it.
In other words, they use Ukraine’s business as a cash cow to gain short-term profits and have no medium- or long-term perspective.
For example, another scandal erupted in Ukraine in January. The accounts of Ukraine’s largest steelmaker Arcelor Mittal Kryvyi Rih (AMKR, formerly Kryvorizhstal) have been blocked. As part of a criminal case over tax embezzlement worth over 2bn hryvnias. The company is sounding the alarm and claims that it may paralyze the works. AMKR General Director for Administrative Affairs Artem Filipiev said: “Law enforcement agencies are ready to paralyze the work of the largest mining and metallurgical enterprise in the country and jeopardize more than 20 thousand people who will not receive their salaries on time”.
It is worth noting that AMKR, a key company in Kryvyi Rih, operates as part of the ArcelorMittal international corporation – the largest foreign investor in the country, the region’s main employer and one of the largest taxpayers in the country. It paid UAH 8.7bn to budgets of all levels in 2019 and UAH 9.3bn in the first 8 months of 2021 (latest figures). The privatization of the plant took place in October 2005 and set a record for Ukraine – the plant was sold for 24.2 billion hryvnias ($4.8 billion at the exchange rate at the time).
In September 2021, the State Environmental Inspection issued a fine of 450 million hryvnias to the company. The company believes that they are facing unjustified charges and calculations of environmental losses. “In the threat of more and more fines and endless unscheduled inspections by the SEI we see unequivocal pressure on business,” said Artem Filipiev. The company’s press service said that constant checks by the environmental inspectorate are nothing but pressure on business.
Losses of the largest Ukrainian steelmaker on foreign markets have significantly affected the Ukrainian budget and the company itself, experts say. Under pressure from the Maidan government, the company completely lost the Russian sales market in 2015, amounting to almost 1 million tonnes of finished products per year. On top of everything else, the new markets require the company to go through the product certification process all over again, taking into account the legislation of the countries to which the goods are to be delivered. And the governments of these countries, when they see that imports are increasing, come up with all sorts of barriers. It can be simply duties, as in the US, quotas, as in the EU countries, or states making the certification rules stricter. As a result, it can take six months, a year, or even a longer period,” said the plant’s top manager. As a result, while searching for new markets and reorientation of trade flows to other regions this niche was occupied by Russian and Belarusian companies. Seven years later, the company has failed to make up for that loss.
Earlier, economist Serhiy Fursa noted that this company was under strong pressure from the authorities, first and foremost from the Office of the President.
According to him, pressure was exerted at the highest level, right up to Arcelor Mittal’s owner, Mr Lakshmi Mittal, who came to Ukraine and met with the president’s office. Now, when asked about Ukraine, he will say that it is a country where the authorities allow themselves to use security agencies to put pressure on investors.
“This deprives us of many investments, because investors learn by word of mouth how they are welcomed in Ukraine”, – Fursa stressed.
As a result owner Arcelor Mittal has already regretted that he went to the mercy of the Ukrainian government, losing assets in Russia, markets for the Ukrainian mill, and in the end got a sea of problems, with the enterprise being held hostage by the Ukrainian state.
Andrey Korshunov, specially for News Front