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Ihor Liski: “Ukraine must become Europe’s industrial powerhouse”

The new economic realities in Ukraine demand change and a tailored approach to each industry to sustain the Armed Forces of Ukraine (Europe’s largest army), finance production, and purchase weapons, said Ihor Liski, Chairman of the Supervisory Board of EFI Group, an investment company. During the discussion panel Economics of National Security, part of the joint New Country project by LB.ua and EFI Group, the businessman outlined the necessary transformations. 

Ihor Liski
Photo: Oleksandr Ratushnyak
Ihor Liski

“For everything to work, for Ukraine to have a chance, we need efficient and affordable energy. Without this, nothing will happen. And we have all the prerequisites: nuclear power, hydropower, solar power, grids, gas storage facilities, and gas production,” Liski said.

In his view, a strong energy sector combined with a solid engineering base will help revive industry.

“We need a new industrialisation of the country. We must become an industrial base for Europe. Only then can we aspire to a different future,” he said.

The agricultural sector, he added, should be another driver of growth, but it must be “completed with added value.”

“We have to at least reach Poland’s level in agriculture. I’m not even talking about the Netherlands or Italy, where they achieve tenfold exports of value-added products with a much smaller land base,” Liski continued.

He also believes that Miltech – a combination of security and innovation – could make Ukraine a global leader. 

“We need radical solutions. This sector needs as much investment as possible. We must create conditions for its development through transparent, long-term public procurement contracts. This is crucial. Because if businesses don’t know what will happen in a quarter, it’s difficult to build an innovative industry.

“And then there’s exports. Without exports, we are cutting off our own wings. The Russians export everything they can because it brings in foreign currency, drives technological development, attracts partners, and creates opportunities. Meanwhile, we have restricted ourselves,” he said.

Trust between government and business is key

Every sector of the economy today requires adequate steps from the government, Liski emphasised. And the first of these should be building trust.

“The government must understand that it depends on the economy and business. And war is no excuse. If the state treats business like a goose, it will get the same treatment in return,” he said, referencing Danylo Hetmantsev’s controversial remark comparing tax collection to plucking a goose without making it scream.

“We need to build mutual trust. Everything else – respect for private property, a transparent tax policy – stems from that. For people to pay taxes, they need to understand why: what the tax philosophy is, how taxes are collected, what they are used for, and that there is no abuse,” he added. 

Photo: Oleksandr Ratushnyak

At the same time, Liski stressed the need to reduce the tax burden to expand the tax base. However, he was sceptical about the feasibility of tax cuts, calling such steps unlikely for at least the next 10-20 years.

“As soon as the war ends, all the financial aid from the US and Europe may simply stop. And who will have to fund the Armed Forces and weapons purchases? You and me. Let’s calculate how much money that is,” he said.

However, he warned against confusing tax cuts with deregulation.

“These are separate issues. I fully support deregulation – removing obstacles, improving legislation, ensuring fair tariffs, and implementing sound economic policies are all crucial,” he said.

Making Ukrainians conscious taxpayers

Liski also backed the transition to gross salaries (total earnings before tax deductions), believing it would make Ukrainians more financially aware.

“The budget is funded by taxpayers. Once a Ukrainian personally pays UAH 1,000-5,000 from their own account, they will start treating public funds, officials, bureaucrats, mayors, and the state as a whole differently. They will understand exactly how much of their money goes to the Armed Forces,” he explained.

Ihor Liski
Photo: Oleksandr Ratushnyak
Ihor Liski

Business needs representation in government

In conclusion, Liski pointed out that the historically distrustful relationship between Ukrainian business and the government stems from the fact that business has never had its own political representation. He argued that this must change to reshape the rules of the game.

“Who do we address? A government that doesn’t answer to us. In reality, we have never brought any government to power. The question is whether we are ready to stop appealing to an abstract state and instead take responsibility by investing in systemic change,” he concluded. 

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