Ukraine Cabinet to create working group to assist IKEA enter market

Ukraine’s Cabinet of Ministers will create a working
group to support the entrance of the Swedish IKEA furniture retailer onto the market,
the UkraineInvest investment promotion office announced on his Facebook page on
Apr. 25. The working group will include Kyiv city administration
representatives “for the complex and effective resolution of issues related to
certifying products, licensing, customs duties and other matters in order to
guarantee that IKEA can open its stores in Ukraine as soon as possible,” said
UkraineInvest director Daniel Bilak.

IKEA officials met with three Ukrainian economic
officials on Apr. 23, Bilak said. Previously, IKEA said it planned to invest
about USD 1 bln to establish its retail chain in Ukraine’s major cities,
estimating the investment in its Kyiv outlet at USD 300 mln, the pravda.com.ua
news site reported. IKEA last announced its plans to invest in December 2017.

Zenon Zawada: The
long-running saga of IKEA coming to Ukraine – which has dragged on for more
than a decade – has become a barometer for Ukraine’s investment climate. It has
almost become tongue-in-cheek, local lore that Ukraine will have joined the
modern world once it has an IKEA store. Numerous times the public was informed
that IKEA’s arrival was imminent, only for the plans to suddenly unravel.

Normally the arrival of a retailer wouldn’t require
the direct involvement of a nation’s Cabinet. Yet “diplomatic intervention” is
needed to mediate IKEA’s strict anti-corruption policy, and the failure of
Ukrainian officials to meet these standards. Regardless of whether this effort
to escort IKEA into Ukraine succeeds however, the Ukrainian government can’t
continue to handle foreign investors on a case-by-base basis if it wants a
developing economy. It should be actively working to create universal
investment conditions (in the courts, licensing and taxation) that make this
market accessible to investors of all sizes. Unfortunately, this is not
happening, as demonstrated by IKEA’s troubles.