In the opinion of Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus, the pandemic has opened up new opportunities for Ukraine. The country’s ability to seize them depends on the willingness of business to change its usual approaches, the ability of the Ukrainian government to enforce the rule of law, and geopolitical stability.

Interviewed by Andriy Tsymbal, Managing Partner, KPMG in Ukraine.

This issue of KPMG Review Magazine is dedicated to Ukraine: its achievements, challenges, successes and prospects. What do you think are the most important changes that happened in Ukraine over the last 30 years?

Most probably, the greatest success of Ukraine in the past years has been the Association Agreement with the EU. It has strengthened the political relations with the EU it has deepened the common values between Ukraine and the European community, and strengthened significantly the economic ties between the two markets.

Another very significant achievement has been the macroeconomic stability which has been reached over the past few years. And the third achievement, given the circumstances post 2013, 2014 has been the cleaning up of the banking system. We have seen the result of that in the way Ukraine has gotten into the pandemic crisis last year with a very strong banking system; very liquid and very much able to sustain and help the real assets to weather the impact of the crisis.

In the context of the Association Agreement with the EU, do you still see a lot of potential for Ukrainian businesses to pursue the opportunities and benefits from cooperation with the EU?

The FTA is clearly a very important source for bolstering the ties and increasing the trade volume between the EU and Ukraine. It has also been a very good way of anchoring the improvement of business practices and production standards: in particular, in the industrial sector in the country.

This also opens up quite significant opportunities for the agribusiness. We are used to thinking about Ukraine in terms of primary farming but I think there is quite a lot that can be done further down the value chain in terms of more added value in terms of both agricultural production and the processing of food.

The pandemic has shown that global value chains should be reconsidered. As a result of the pandemic and the overall disruption of the supply chains around the world, nearshoring and onshoring practices have spread globally. This may open quite a lot of opportunities for Ukraine, especially given the ability of the industrial sector here to respond to challenges in terms of technology and knowhow. We have seen that, for instance, in the IT sector. Ukraine has an opportunity to play a significant role in this nearshoring process.