Ambassador John Herbst remarks at the Volia-Cable
Kyiv, Ukraine
July 21, 2004
[Today I had a chance] to become acquainted with operations of Volia Cable.
I have to say that I'm very impressed with business operations. And I understand that they provide cable service to over eight hundred thousand households in Kyiv. I can see why they do that, because they offer an excellent product and they also offer it a very reasonable price. As I understand it, the least expensive package, the social package, costs only one Hryivna per month.
I' m here in Volia Cable for a couple of reasons, besides to become acquainted with its operations. First is, as you may know, Volia Cable is an investment of an American mutual fund. A mutual fund is a collection of capital from many, many investors, which is then used for investment in enterprises all around the world. And it's a common form of investment in the United States and in advanced economies generally. But there are very few mutual funds which actually invest in Ukraine. So it is important that when mutual funds invest in Ukraine that they see some profit from their investment because that will bring more capital into the country. So that's the first reason that I am here.
The second reason I am here is that Volia Cable seems to be under extraordinary pressure, arbitrary pressure, from some authorities. And this pressure has even taken the form of a statement by one office, which was casting aspersions on American investment. I frankly don't understand this. Ukraine has a vibrant economy. And it has excellent macroeconomic policies. But on the microeconomic side, when it comes to the laws that protect private property, when it comes to the courts, when it comes to the actions of government officials which affect business, there are many problems which are a big, big obstacle for foreign investors. And I'm afraid to say that we see those factors, or some of those factors at work here, putting unfair pressure on Volia Cable.
If when one of very, very few mutual funds which invest in Ukraine finds its investments unfairly under threat, future investors will not want to come to Ukraine. And of course what that means is that Ukraine will not grow as quickly, and Ukrainians will not have the services which come with foreign investment.
Thank you very much.