January 27, 2017

Petro Matiaszek: promoting Ukraine via “honest dialogue” with investors

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Petro Matiaszek

KYIV – Petro Matiaszek prefers “government relations and communications” to the streetwise adage of “fixer” to describe his 23-year illustrious role in Ukraine. For nearly two decades, the New York Law School graduate has smoothly navigated among the three sectors of society – public, private and civil society – with such fluidity that he could easily build a checklist of accomplishments:

Bring Kentucky Fried Chicken to Ukraine – done.

Translate for ex-President Viktor Yushchenko – done.

Send parliamentary delegations to Europe – done.

Help raise some $25 million to help Ukraine’s war refugees – done.

Ultimately, it was the late renowned economist Bohdan Hawrylyshyn who brought the Paterson, N.J., native to Kyiv. Dr. Hawrylyshyn made a fateful offer over the phone in July 1994 for the recent graduate in Manhattan to an initial one-year consultancy stint at the newly created Council of Advisors within Ukraine’s Parliament that was being funded by philanthropist George Soros.

The mid-1990s “was about building a country… In some ways that’s still going on. That was for me the most fascinating thing that I couldn’t get in America,” Mr. Matiaszek, 51, said of his decision.

Ukraine was being reborn. Nation-building was in full swing.

And Mr. Matiaszek was involved in transforming the nation’s Soviet-era rubber-stamping legislative body into a bona fide institution, where he landed to assist in proper bill research and writing, among other duties that eventually extended to three years. He also built ties with foreign Parliaments by sending Verkhovna Rada delegations abroad through a Soros-funded project.

Marrying his Ukrainian American heritage – his father was a World War II refugee from western Ukraine and his mother a Dutch Anglo-Saxon who traced her roots to colonists who settled in the New World in 1640 – to nation-building in Ukraine, he said, amounted to “being part of a movement.”

“This was a way to continue doing that, but now living in the country and working in the government,” he said in a downtown Kyiv café not far from his apartment that overlooks Independence Square – the site of two people-power revolutions in the past decade.

It was a desire, he said, that stemmed from wanting to work in Europe because of its “Old World” charm since he’d fallen in love with the continent during the 1980s as a university student. So, when Ukraine declared independence in 1991, “everything was starting,” he said.

“To be here at the ground level. Everything was new, literally every week… Whether it was creature comfort, or a restaurant, store or product, but it was also institutions and organizations, and new people excited about the country,” Mr. Matiaszek said.

Many politicians passed through his doors while they interned at a parliamentary U.S. government-funded program to which he devoted time. The current ecology minister, Ostap Semerak, a former lawmaker known for being an anti-graft crusader, interned in 1995-1996. Andriy Mahera, the deputy head of the nation’s Central Election Committee, also was an intern, as was Valeriy Karpuntsov who is a second-term member of the Verkhovna Rada.

“That was a legacy project that I still take pride in and made a big difference for Ukraine today,” Mr. Matiaszek recalled.

Today, he is again in the public sector as the deputy head of UkraineInvest – Prime Minister Volodymyr Groysman’s investment promotion office – after being hired on October 19, 2016. And who better to help reach the agency’s lofty goal of bringing in $1 billion in foreign direct investment this year?

Mr. Matiaszek brings an additional 10 years’ experience in international technical assistance in legal reform, mainly in U.S. government-funded projects.

“I had a lot of government contacts, I knew how the government works. How laws are made, how they’re influenced and processed. That was of use in these projects,” he said.

When Western funding started to dry up amid disappointment with ex-President Leonid Kuchma’s increasingly authoritarian administration in 2002, the government relations expert moved to the private sector.

In 2002, he headed administrative and financial affairs at the international law firm Baker & McKenzie, where he was deeply moved by the Orange Revolution two years later. People of all strata of society took the streets of Kyiv to protest a rigged presidential election in favor of Viktor Yanukovych, then prime minister, whom Russian President Vladimir Putin had called twice in vain to prematurely congratulate before a repeat vote propelled Viktor Yushchenko to victory.

“That was a sea change in the country,” Mr. Matiaszek said of the popular uprising. “At that time, that was the most dramatic thing that happened to Ukraine in decades. The 1991 declaration of independence pales in comparison to 2004 in significance. People understood that the country was in danger and came out to save the country in 2004. That’s when people stepped up in a big, dramatic way to change the course of the country.”

Like the Revolution of Dignity of 2014-2015, “people power made the difference” in the calculus of making the two popular movements successful, according to Mr. Matiaszek.

He explained: “People who instigate these conflicts didn’t factor in the people. All three significant people power movements in modern Ukrainian history have gone way across all lines: it is east and west, it is Russian and Ukrainian language, it’s those who appreciate the Ukrainian cultural and historical perspective. And those who have no idea what that means. The reason why they were successful was because it was extremely horizontal.”

It’s the same reason Ukraine has succeeded in resisting Russian aggression, albeit feebly.

“Because you have broad representation of all different people, and that’s what makes Ukraine a pluralistic society. Ukraine had no internal strife before the Russian operation began,” Mr. Matiaszek said.

Girded with a wealth of government contacts and an intimate knowledge of how Ukraine functions, he was hired in 2006 by a law firm client to help Western companies enter the market.

Realizing that “ ‘brand Ukraine’ debuted in 2004, not in 1991,” Mr. Matiaszek started advising Coca-Cola, Norwegian telecommunications giant Telenor, America’s Citibank, and oil and gas companies.

This eventually led to opening Ukraine’s first KFC restaurant in 2013, an event that marked the first public appearance by Geoffrey Pyatt as the country’s U.S. ambassador. Located at the central railroad station in Kyiv, it was the world’s biggest KFC drive-thru.

Starting in 2010, consulting became difficult under the presidency of Mr. Yanukovych: “It was very clear at certain meetings… that the writing was on the wall. It was clear I could get the meeting with the minister or deputy minister… to talk about this great foreign investor that wants to come in. It was clear they weren’t interested. They met out of, I don’t know, respect for me or the company. Then, of course, I had to communicate that. I had to often turn on the cold shower.”

Luckily, in 2011, two American equity investors approached Mr. Matiaszek to help them bring internationally branded quick service restaurants to Ukraine. Together, they founded Global Restaurant Group, and with $15 million have opened five KFC units since. They originally had planned to also introduce Starbucks and Pizza Hut, but the Maidan revolution and subsequent Donbas war ended their “original robust” plans, Mr. Matiaszek related.

Meanwhile, he and his wife, Lydia, were always involved in charitable endeavors, including work with Caritas Ukraine, a Catholic-affiliated group. Since the 2000s, Mr. Matiaszek sat on the Christian charity organization’s supervisory board and became involved on a daily basis in humanitarian affairs when Russia engineered an armed uprising in eastern Ukraine in April 2014. Over two years he helped raise some $25 million to assist internally displaced people, reaching nearly 300,000 beneficiaries, according to the group’s latest report.

He also volunteered his services to Mr. Yushchenko, acting as his English-language interpreter for five years during in-country visits by high-level officials. They included Israel’s president, the king of Sweden, U.S. President George W. Bush, and Vice-Presidents Dick Cheney and Joe Biden.

“I knew his style of thinking and speaking – that made it easy – and he didn’t often go off script, which could terrify any interpreter,” Mr. Matiaszek said of Ukraine’s third president.

“Biden, he was impressive as an American politician, someone who tried and succeeded in becoming a friend and in sharing his problems and shortcomings in how it is to be a vice-president of the U.S., and good at the jokes. He had a Coca-Cola with Yushchenko near the Pecherska Lavra and commented about pretty women in Ukraine,” he recalled.

With potential investors, Mr. Matiaszek said he strives for “honest dialogue.”

“I represent Ukraine here and promote from within the country. I believe you have to come and have a look yourself. Seeing is believing, seeing is understanding. One of the approaches that we’re using to promote investment is ‘Ukraine is better than you think,’ ” he said.

War shouldn’t be a detriment to that, Mr. Matiaszek stated, drawing on Israel and the protracted civil war in Colombia as examples of how countries could still draw foreign investment.

He believes in communicating Ukraine’s success by telling the “story the way it is.”

“We have to have a frank dialogue about Ukraine that isn’t dishonest, [that admits] what are its challenges,” he added.

There’s plenty of room for investment in whole industries and niches. Mr. Matiaszek mentioned high-technology, food production, infrastructure projects, agriculture, waste management, aerospace, healthcare and education among the abundance of opportunities awaiting strategic and smart investors.

Similar investment obstacles exist as they did in the 1990s: “corruption is front and center,” as is a crooked judiciary, over-regulation and a convoluted tax system.

Asked what sustains him, Mr. Matiaszek said it’s “being able to work with young people who really are talented, smart and motivated, who want to do something new and exciting.”

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