日本語

In February 2024, the Japan-Ukraine Conference for Promotion of Economic Growth and Reconstruction marked the rising momentum of Japanese private sector engagement for Ukraine’s recovery and reconstruction.  Since the conference, Japan-Ukraine business collaboration is one of the key topics for Japan’s engagement in Ukraine’s economic recovery.   

On the occasion of G7 Justice Ministers’ Meeting held in July 2023 in Tokyo, the “Tokyo Declaration” was adopted to set up “Anti-Corruption Task Force for Ukraine” (ACT for Ukraine) under the coordination of Japan. On 6-7 November 2024, Japan hosts the ACT for Ukraine Tokyo Conference to discuss the issues of anti-corruption measures with G7 and international partners. Using this opportunity, UNDP as a partner of ACT, together with the Ministry of Justice of Japan and the Japan External Trade Organization (JETRO) co-organizes a public side event to promote further Japan-Ukraine business cooperation by discussing the opportunities and challenges for doing business in Ukraine.  

Background: 

Despite the Russia’s full-scale invasion, Ukraine offers a large consumer market, a highly educated and cost-competitive work force, and abundant natural resources. The government continues to advance legislation to capitalize on this potential with numerous corporate governance and other economic reform draft laws designed to bring Ukraine into compliance with international standards and regulations currently moving forward. Ukraine’s on-going reconstruction is anticipated to attract hundreds of billions of dollars from governments, International Financial Institutions (IFIs), and the private sector. However, corruption, especially in the judiciary, remains a challenge, one of the affecting factors for international business. 

Ukraine is regarded as country of business potential, particularly in the agriculture, consumer goods, and technology sectors. Ukraine is an agricultural powerhouse and one of the world’s largest grain exporters despite Russia’s efforts to block grain exports. Ukraine has long had a skilled workforce in the IT service and software R&D sectors. The technology sector has grown over the last year even with Russia’s full-scale invasion of Ukraine. 

Despite Ukraine’s potential, foreign direct investment (FDI) remains low. Russia’s intentional destruction of Ukrainian civilian infrastructure, occupation of a significant share of Ukrainian territory, fierce fighting on the frontlines, missile and drone attacks on civilians and civilian infrastructure throughout Ukraine, disruption of the workforce due to the invasion, unexploded ordnance contamination and other ecological consequences of the war pose challenges to new and existing investors. However, most areas of Ukraine are not on the frontlines.  

Highlighting the different risk perceptions of foreign investors in Ukraine with those outside the country, several existing foreign investors are making new direct investments of tens of millions of dollars each while investments by new investors are limited. Pre-existing problems with corruption and an unreliable judicial system persist, and Ukraine’s adoption of wartime currency controls and a fixed exchange rate regime has added new complications. Nevertheless, reconstruction and recovery offer significant potential opportunities, particularly for early moving investors with a high-risk tolerance. 

During times of war, businesses aren't just neutral players. In Ukraine, companies, both local and international, have reacted to the war challenges, and adapted their operations to these challenges using “business and human rights approach”. There are lessons learned on applying the heightened Human Rights Due Diligence, business integrity concept, and best practices for addressing challenges related with running business in Ukraine through business associations, the Business Ombudsman Council and other organizations.