Interview Ukrainian macroeconomics

The German-Ukrainian Chamber of Industry and Commerce is a platform for beneficial development of countries

Andreas Lier on the role of the German-Ukrainian Chamber of Industry and Commerce (AHK Ukraine) in building effective economic relations between the countries, on the global network of German foreign trade chambers, on the importance of  AHK Ukraine for business and on the achievements of 26 years of its activity in Ukraine.

: What is the purpose of AHK Ukraine in the context of relations between countries? When was the Chamber founded?

A. Lier: In short, our Chamber unites German and Ukrainian enterprises, we are a platform for the development of the German-Ukrainian business.

However, this is not everything, of course. If you look deeper, the Chamber has one more important function than just networking. АНК is the embodiment of the principle of business self-management. For example, we provided the government with a full report with the proposals “Attracting investments through reforms”. In this document, we considered not only business interests, but also state and macroeconomic interests.

It is believed that the main task of the state in the economy is not to interfere. However, it is not so simple. The state should support those solutions that business cannot cope with. For example, business in Germany organizes the lion’s share of specialized secondary education with the help of similar chambers. Representatives of educational institutions call it the “principle of subsidiarity”. Once adhered to, state bodies have the right to regulatory intervention only when business and society fail to cope with self-regulation. The Chamber is also constantly making proposals for improving the investment climate in Ukraine. Every year, we organize numerous events in Germany to promote the image of Ukraine. Recently, on November 29, 2018, with our German partners, we organized the 3rd Ukrainian-German Business Forum in Berlin, in which both Ukrainian Prime Minister Volodymyr Groysman and German Federal Chancellor Angela Merkel took part. Speaking at the Forum, Angela Merkel called our Chamber “the engine of German-Ukrainian economic cooperation.” For example, the organization contributed to the increase of permits for the Ukrainian transport business. In November following our initiatives with the Ukrainian side, the German side additionally issued 10000 permits for entry into Germany for Ukrainian trucks.

We are nowpromoting Ukrainian exporters in the development of more intensive trade relations with German firms.

: Who can become a member of the Chamber? Is it just a German company? How do companies benefit from Chamber, what they get from you?

A. Lier: Any organization involved in German-Ukrainian economic cooperation can become a member. Today, the Chamber has about 130 participating companies – investors from around the world: Germany, Great Britain, Luxembourg, Netherlands, Poland, Turkey, France, the Czech Republic, Switzerland, Japan and, of course, Ukraine. This is our peculiarity: unlike many other foreign business associations in Ukraine, we give any Ukrainian company an opportunity to become a full member with the right to vote at the Annual Members’ Meetings.

As a member of the Chamber, companies can participate in our business events, business delegations, economic forums and so on. They also have the opportunity to receive first-hand information about recent changes in legislation and the regulatory environment. Representatives of the Ukrainian business appreciate the fact that membership in our Chamber increases their visibility in the German business environment.

: How long have you been working in it? What did you do before?

A. Lier: I was elected President of the Chamber at the first Full Meeting of Members in October 2016. However, we must understand that I “do not work in the Chamber,” I am a president on a voluntary basis but not an employee of this organization. As part of my core business, I am the Managing Director of BASF Ukraine, and I am also responsible for the country cluster East Europe, whichunites Ukraine, Moldova, Georgia and Armenia.

I want to note that in Germany, this principle is observed in almost all business associations: the president is always an active entrepreneur, the chairman of the board is on the position below. Here he is (Alexander Markus. – Ed.) a hired employee, not me. All other board members are also entrepreneurs. On the one hand, we ensure maximum closeness to our member companies and topics of their interest. On the other hand, this is a responsibility of business representatives who invest their free time in the work of the chamber so that the self-government principle could function and work. In some sense, we work as volunteers who want to make Ukraine better for the whole business, not just for the German business.

: What is AHK Ukraine development plan for 2019? What results do you want to achieve?

A. Lier: As I have already mentioned, in the speech at the 3rd Ukrainian-German Business Forum in Berlin, Angela Merkel called AHK Ukraine the engine of German-Ukrainian economic relations. Such an assessment shows that Ukraine has taken the right and successful path of development, as well as what an important role the German-Ukrainian Chamber of Commerce plays in this process. After all, we represent Ukraine in Germany, advise those companies that are interested in the Ukrainian market, and thus,я ensure the success of German projects in Ukraine.

Next year we will have a whole series of events about Ukraine in Germany, for example, now we are preparing for Hannover Industrie that is the largest industrial exhibition in Europe. We will invite Ukrainian industrial enterprises to demonstrate the export potential of the Ukrainian regions.

Even not looking in detail on the certain activities and events planned for this year, we try to provide enterprises with as many opportunities as possible to express themselves and contribute to the further development of both Ukraine and Germany.

I want to emphasize the importance of the work of our committees, holding of various events, the creation of automotive cluster initiative and the constant protection of the interests of our member companies. In addition, our plans include the development of vocational education in Ukraine. This topic will be very important for the further development of Ukraine. If we fail to create future prospects for the Ukrainian young generation, then, in five years, it will be very difficult to develop production in the country, because the staff will simply leave to work in neighboring countries.

: What are your own 5 principles/priorities that you follow in your work and life in Ukraine? Which ones are specific for Ukraine and how does this list look like for Germany?

A. Lier: To be honest, I do not think that my priorities and principles may be determined by any particular country, whether Germany or Ukraine. It is important for me to take responsibility for my professional activities and to be responsible for my words, to benefit the company and develop the team with which you are doing a common business. It is important not to spend too much time on urgent but not very important things, without paying attention to those things that are truly important and will be beneficial in the long run. Of course, personal principles are fundamental. To be happy, to love, to think positively, to spend as much time as possible with family and friends, to appreciate what you have, not to think about the past, not to dream about the future – to live here and now.

: What are the 2018 key trends that AHK highlights in developing the business of German companies in the Ukrainian market?

A. Lier: Today, new investors from Germany are interested in Ukraine due to low production costs and well-trained staff. Therefore, some German firms consider Ukraine as a region for the development of production. Other German enterprises that plan to locate their service centers in Ukraine also apply to the Chamber. This is a very good trend, as these investors need staff with knowledge of foreign languages and high professional competence in certain areas of activity.

We also see that not only the great German business is interested in opportunities in Ukraine. Your market is attracting more and more attention from small and medium-sized businesses. At the same time, Ukrainian business is still quite modestly using the opportunity to demonstrate its advantages to German partners. For example, it would be great, if the regions together with government and business organized national stands at key exhibitions of the world. For the first time in the last 4-5 years, such a national stand was at the Berlin exhibition “Green Week” in January this year. It had great success, everyone admired. However, one exhibition is not enough, Ukrainian stands should be presented at 20-25 key exhibitions of the world, and only then the result will be visible.

Investment activity of Ukrainian enterprises in 2018 slightly decreased. It was felt by German manufacturers of industrial equipment and technology. In general, the growth of imports from Germany no longer lasted as it was in 2016-2017, but remained at 3.7 %. At the same time, according to the German Federal Statistical Office in January-November 2018, the growth of Ukrainian exports to Germany reached 17.2 %.

: What were the main areas of business Ukrainian companies developed in the German market in 2018?

A. Lier: Frankly speaking, unfortunately, Ukrainian business in Germany is represented very poorly. We still have to work on this, that’s why we have created the Ukrainian Export Helpdesk in the Chamber. In my opinion, the most important thing is that German and Ukrainian entrepreneurs find each other and could meet in person. Therefore, we encourage the participation of Ukrainian enterprises at exhibitions in Germany, we organize our own business delegations on various issues. We organized the last delegation in Berlin on the “Automotive industry” and “Information technologies” topics at the annual business forum in November last year. The event was a great success.

It is important to know that our Chamber works in both directions: on the one hand, we represent the interests of German business in Ukraine, on the other hand, we actively promote Ukrainian business in Germany. Recently, for example, one Ukrainian honey producer who had a dispute with a German business partner regarding supply and payment turned to us. We gave him the contacts of the Hamburg Chamber of Commerce and Industry, where he can use the services of the Business Mediation Center for pre-trial conflict resolution.

: The AHK recently created a new mediation working group. What questions about the practice of 2018 became the reason for its creation? What do you forecast for 2019?

A. Lier: Mediation as an alternative method of pre-trial resolution of conflicts for more than 10 years in practice has proven its effectiveness in the developed countries of the world, including Germany. We in the Chamber have created not only a working group on this topic, but also the Business Mediation Center. I want to note that in Ukraine the institute of mediation is still in a state of formation. The Mediation Working Group and AHK Ukraine Mediation Center can become one of the most effective tools for its development and popularization in Ukraine as one of the effective tools for resolving conflicts in the world. This, in turn, will contribute to strengthening the European vector of economic development in Ukraine.

: How does  AHK work with media in Ukraine? You publish your own bulletin for members of the Chamber. What questions do you go with on the Ukrainian media? How do you select them for the most effective solution for your communication tasks, what are the criteria?

A. Lier: Fortunately, the Ukrainian media turn to us first. However, there are cases when the Chamber considers it necessary to turn to the local media to popularize a particular topic or event. For example, it was so with the 3rd Ukrainian-German business forum.

: How does the Chamber promote Germany as a country and market in Ukraine? What opportunities does it open for Ukrainian entrepreneurs and companies?

A. Lier: The German quality and economy have been the flagship of world development for many decades. In 2018, Germany ranked fourth in the world’s overall GDP ranking. The World Economic Forum has recognized the economy of Germany as the most innovative in the world. The German government is ready to share its achievements with other countries, in particular, with Ukraine. For this purpose, was created a network of foreign trade chambers of commerce to support and develop bilateral economic relations through the exchange of experience, providing financial support for the implementation of certain projects, lobbying the interests of enterprises, etc.

Among the opportunities offered by the German-Ukrainian Chamber to local entrepreneurs and companies, I would like to highlight the provision of a platform for the development of contacts through participation in the Chamber’s events – delegation visits, B2B meetings in Germany, information and social events.

: What issues can the Ukrainian business address to the AHK and receive qualified assistance and support from the Chamber?

A. Lier: AHK Ukraine offers Ukrainian business its qualified assistance in support of exporters when entering the German and EU markets, participating in business delegations and B2B meetings in Germany, searching for potential partners and customers, and providing information on them, assistance in development of export strategy, advising on patent, tax and commercial law.

: How has the German market changed for Ukrainian goods and services for 2018? Has it become more closed and competitive, or vice versa, the quality of Ukrainian products has become better and customer confidence has increased? Are there differences between different industries?

A. Lier: GDP in Germany in 2018 amounted to 3.4 billion Euros – this is about 34 times more than Ukrainian GDP; The volume of exports of goods in 2017 amounted to 1.279 billion Euros – a figure that is 33 times higher than the same indicator of Ukrainian exports. The German market is so incompatible with the Ukrainian one that, in my opinion, it’s not the market that should change, but those who want to work on it. They have to adapt to it. Ukrainian business needs to understand that due to its central location in Europe and its high purchasing power, Germany is the perfect gateway to the whole European Union. Those who succeed in the German market will open the market of the whole European Union.

Please read: Establishing fair and transparent rules of the game begins with the business itself

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