by Craig Senyk, Mawer Investment Management
In a dramatic climax to weeks of political escalation in Ukraine, Victor Yanukovych has recently been ousted from the presidency and is now in Russia leaving a beleaguered Ukrainian population to pick up the pieces of a tattered nation. Ukraine is now embroiled in a battle for the country’s soul, with Russian troops occupying southern Ukraine and Yanukovych refusing to extricate himself from the country’s political future. Even if the drama settles down, a great deal of work is now required to rebuild a country that has seen little progress in recent years.
It was ten years ago that I visited Ukraine. Then, like now, it was a country divided between Eastern and Western ideologies and paralyzed by corruption. My trip took place six months before the national elections, which ultimately lead to the Orange Revolution. Traveling in rural Ukraine was like taking a trip back in time. I saw farmers’ using pitchforks to stook hay and oxen pulling plows. Many Ukrainians were living the same lifestyle that my grandparents, who emigrated from Ukraine, had lived in early Alberta, some 100 years ago.
Before my visit, I had rather ignorantly attributed the country’s failings to the capabilities of its people. It was not long into my trip that I realized how inaccurate my views were. Many of the young people I met had two or three educational degrees, spoke multiple languages and were far more accomplished as individuals than I. The challenge for Ukrainians clearly wasn’t education or capability: it was a lack of opportunity. Ukrainians were victim to years of ineptitude and corruption of its government.
Ten years later, not much has changed.
Today, even if Yanukovych remains out of office, Ukraine has a long road to creating opportunity for its vastly untapped populace. But before the country can even begin to create forward momentum, it must be able to govern itself in an environment free of corruption. Instituting a significantly more trustworthy government is one of the first steps to economic development.
As investors, Ukraine reminds us how crippling corruption can be to the economic progress of a nation. Stable governance is required to create opportunity for people, whether employees or investors. The current situation in Ukraine is a valuable reminder for anyone who invests in a country where corruption is a significant issue.
Of course, what is happening in Ukraine has much broader relevance to society than the mere implications to investors. There are now 45 million people in the world that have an opportunity to create something more for themselves. The future of Ukraine lies not in the leaders of the past (including those from the Orange Revolution) but in these young people I met who are the leaders of the future. The key for them will be to find leadership models that differ from what they have witnessed to date. This may be the hardest task of all.
Craig Senyk
