Brian Bonner: Good day, everyone. This is Brian Bonner, host of Hromadske Radio’s Ukraine Calling, with another exciting episode. I’m very glad to have Andrew Pryma this week. He is a very interesting Ukrainian-American, co-founder and chairman, of Ukraine Business News, a must-read source of business news and commentary since 2018, for six years now, and more. And so welcome to the program, Andrew.
Andrew Pryma: Thank you, Brian, for having me. It’s a pleasure.
Brian Bonner: And it’s such a must-read, I even paid my $99 subscription. He had it free for all this time, but obviously, you can’t build a business by giving away things. He started a subscription, which is challenging in these publishing times. But, Andrew, I’ve read your biography, and you were born in Kazakhstan. You grew up in Ukraine. You left for America 21 years ago in 2003. And you came back six months before the start of the full-scale war. And you were an investment banker, too. Tell us about your background and why you started Ukraine Business News.
Andrew Pryma: First of all, yes, after graduating from a university in Ukraine, I worked for a year, but I wasn’t satisfied with my education. I thought that was the time to take it to the next level. The next level was an MBA degree in the United States. The United States has always been famous for its great business programs.
In 2003, I received a student visa and went to the United States to study. I graduated from two colleges there. I went straight to Cleveland, Ohio. This is where the school of my dream was, Case Western Reserve University. I’ve actually graduated from an MBA program at Weatherhead School of Management.
So I went there in 2003, graduated from Case Western in 2013, got my first job at Goldman, and spent a little bit over a year there. Then I worked for a few other financial firms and investment firms and the firms that were mostly concentrated on investments in real estate and real estate development.
However, in 2017, I started thinking about returning home. The idea was: Okay, how do I build that bridge back home? I had been away for almost 18 years at that time. Your friends are working in different places where they used to work. You don’t have those people that you used to know. So you’re coming back home completely as a stranger. You don’t know people.
And I met a Wall Street journalist who was actually looking for investors. Investors in, back in the day, it was Ukraine Business Journal. It was 2017, and I saw a great opportunity because I like the reporting style. It was short news, positive, and people loved the news. And at that time, if you remember, there were no English publications besides the Kyiv Post.
Brian Bonner: Yes, I remember. I was there.
Andrew Pryma: The Kyiv Post covered so many different issues, politics, business, and culture, and this and this and that. But my idea was to create something unique, which would specifically talk about business. What is actually happening in Ukraine in the business and investment environment, and what are the struggles of the investors in Ukraine, etc.
I founded Ukraine Business News in 2018. I left the team of Ukraine Business Journal and hired a couple of people, and this is how we started. What helped was that it really helped to be introduced to so many people. We were specifically talking about business issues in Ukraine, and that model attracted so many people.
And even today, 70% of the people are foreigners who are reading the news and who are interested in the Ukrainian market. So that was the idea. The idea was to build a publication that would educate or inform people about the investment landscape of Ukraine.
So usually when I meet with people, they say: oh, Andrew, it’s nice meeting you. We’ve been reading UBN news for the last five years. When I actually started thinking about investing in Ukraine, after reading your news for about a year, I already had a great understanding of what kind of environment is out there and what I can do to succeed.
Brian Bonner: Well, that’s very brave and entrepreneurial, because as you know, we have our own challenges. But before you get to that, I’ll ask you: I’m not Ukrainian American, I’m an American who is a permanent resident of Ukraine, who’s made my home here. Friends and family always ask me, especially now, what are you doing? And you’re an American citizen. Why are you leaving the richest, best country in the world to go to Ukraine, which has very many challenges? How do you answer?
Andrew Pryma: It’s a very interesting question. People keep asking me the same question, and sometimes they just say, you’re crazy. You had an opportunity to have two days right before the war, because we were informed that the war is going to start in a couple of days or maybe a week. And a friend of mine just called me on February 22nd and said: Andrew, it’s going to happen, it’s not going to be 2013, 2014 it’s going to be bigger than that.
I’ve seen many Americans leave the country, but it took me so many years to finally return to Ukraine. I’ve been dreaming about returning to Ukraine sharing my experiences, my expertise, and being helpful to this country. And I decided to stay. My wife and I will stay. And I’ve never had any regrets.
At the same time, Brian, people still need to understand how big the opportunities here in Ukraine are. When people see those roads that are totally broken, those are the opportunities. Sooner or later somebody is going to build those roads. When you see those destroyed bridges, sooner or later, somebody is going to build those bridges.
So, our country is extremely underdeveloped. This is where the opportunities are. I understand that there is a war. I’m not saying that everything is perfect in our country, but we will get to that point when there is going to be a time when people will be more than happy to come to this country, invest, and see this country rising from the ashes.
Brian Bonner: Well, let’s hope we don’t get to the ashes. In your mind, are you more Ukrainian or more American?
Andrew Pryma: I’m Ukrainian by heart, but the United States is my second hometown. I love Cleveland, which is my second hometown. America has given me so many opportunities, education, and the way I think right now.
Brian Bonner: sounds like you got tired of working for other people too.
Andrew Pryma: That’s true.
Brian Bonner: Like a true entrepreneur. Well, one thing I like about Ukraine Business News is that I like many things. It’s a positive outlook, very informative, and takes little time to get through that day’s news, yet it does a good job of picking the highlights. But it’s not a cheerleader. It’s not, you know, an American Chamber of Commerce cheerleader: everything is great, everything is rosy, come here now.
In fact, your editorials are some of the hardest-hitting we’ve seen. They inject a dose of realism. One thing I want to ask you now is: Before the full-scale war, Ukraine already had problems with the rule of law, corruption, bureaucracy, Soviet infrastructure, Soviet mindset, et cetera. Now, if you add to that the full-scale war, that’s a powerful deterrent to investors.
Even Zelensky, who I think reasonably favorably disposed to the administration, Rostyslav Shurma (Deputy Head of the Office of the President of Ukraine – ed.) said that we won’t get any meaningful investment until the war ends. I also heard about General David Petraeus, who is on the board of KKR, a big investment firm in DC with $560 billion in investment assets. He says we won’t take the big step until the war ends and all these other problems are solved. Do you agree? And given that situation, where’s the optimism and where’s the investment?
Andrew Pryma: The largest investments. We’re talking about firms investing $3 billion, $5 billion. That is not going to happen before the war is over. I agree with that. We have a lot of information coming through UBN, and we see what people’s requests are and what they’re interested in. We see that many companies have already started doing due diligence.
Do I want to say everything’s perfect, everyone is rushing to invest? No, not at all. But there are companies who actually have plans after the war is over, and have the plans to invest. They’re already doing some work, they’re already exploring. They already have their own people open offices, they’re exploring, doing due diligence. For example, they want to work in mining. Okay, so they’re already doing some work.
Mostly big foreign businesses still need to invest. However, small- and medium-sized businesses are already taking the first steps. Let’s define a big company or a large investment. For example, just the recent news: a Canadian company, that is interested in investments in mining, is already making first steps to invest $800 million. It’s a significant amount of money. So, as of today, they are already making the first steps and trying to get the permits for money. So $800 million is a big sum of money. It’s a large business.
Brian Bonner: The mining permit process was corrupt in the past. Did you note Horizon Capital? What did you think of this? The Volia cable-Lifecell merger?
Andrew Pryma: I believe this is the French investor. He purchased the Volia company, and he’s purchasing a mobile company, and he’s trying to merge that with his large holding company. And because he sees the potential, for sure. Because, look, during such conflicts, people are buying for cheap. Because I’ve seen people: you know what, I’m not interested. They’re panicking. I want to sell it. And people sell it at half price.
So, some companies with deep pockets are taking advantage of that. For example, the Ukrainian government is putting seaports and river ports for sale. When I spoke to British investors, it was like: $5 million for a seaport, when in our country it costs like a billion, $2 billion? I was like, yes, it’s not a brand new seaport, you have to invest half a billion dollars to build the infrastructure. But that’s the potential.
British companies, for example, are coming to Ukraine, and I’ve hosted so many of them. They come in and look around, and they explore it. They’re meeting with the government officials, they’re meeting with the stakeholders. They’re looking at things. We’re talking about the foreign businesses. However, foreign businesses that have been doing business in Ukraine for quite a long time are fearless in investing. For example, McDonald’s just announced that they are investing 1 billion hryvnias and opening six new stores.
Brian Bonner: Yeah, I agree with you there. The insiders know the ins and outs. How is the war going to change what sectors are going to be really attractive? Now, first, we’ve got to win the war. And what we’ve known, and you’ve written about this, is that basically our defense sector was destroyed from the years 2000 to 2014. We gave away our nuclear weapons in the 1990s. Now we see that Western aid is very slow and inadequate. This all argues that the defense sector and domestic production of weaponry are going to have to be the investment priority.
Andrew Pryma: But this is what’s happening. The biggest amount of money from foreign investors is coming into the defense sector. Because it’s not just investing in the defense sector. You can actually build the weapons, implement innovations, and test them on the front lines. How many companies are selling weapons that probably have never been tested in a real war, in a real war zone? And this is a total difference.
Brian Bonner: Unfortunately, we are the testing ground.
Andrew Pryma: Yeah. And I see so many interested companies, and they actually invest in artificial intelligence. For example, electronic warfare is needed so badly. The government attracts many foreign companies, German companies, French companies, British companies, to collaborate. Zelensky’s government is actually making sure that these companies have everything they need to start their operations in Ukraine. Because we’re running out of the time.
Brian Bonner: The defense sector is a bright spot you see for investment. What other bright spots have you seen or do you see now?
Andrew Pryma: I have a small list, but, for example, the German company bought an amber deposit in the Rivne region. So, they understand, first of all, how cheap they’re buying that in Ukraine, especially at these times. Concord Capital, this is a Ukrainian company, purchased a limestone deposit in the Dnipropetrovsk region. And the Dnipropetrovsk region is being shelled constantly.
So, there are some assets that people and companies are interested in. Let’s not forget, that Ukraine has the second largest lithium deposits, which is used to produce the batteries for electric cars. And you see it all over the news that the number of electric cars purchased, not just in Ukraine, but all over the world, is increasing constantly.
So, this is a huge market. And can you imagine, with a cheap deposit cost, cheap permits, and cheap labor cost, the cost of mining the lithium, or production of the batteries? It’s going to be very competitive in the whole market. I think even China cannot compete with such low prices. I think these are the opportunities. And that’s one of them.
For example, Ukrnafta just announced a couple of days ago, that they want foreign investors and partners to come and help Ukrnafta, the state company, to drill wells and mine oil. The resources of Ukraine are extremely rich. Yes, nobody ever liked investing significant amounts of money, because there was no political stability. And now there is war. However, those foreign companies are looking around and doing due diligence for future investments.
The only thing we need right now is to win the war. And the investments will come to Ukraine. I don’t know if we’re talking about a trillion dollars. I don’t want to say that we’re going to get a trillion dollars. We won’t get a trillion dollars, let’s be realistic. But I agree that hundreds of billions of dollars can come to this country.
Brian Bonner: Let’s say we win the war. Don’t we still have other problems: rule of law and corruption? Now, as you see, investigative journalists and, to some extent, the government bust out corruption scandals, big ones, every day, catching people stealing from the defense sector or the usual ways through inflated procurements and kickbacks. Do you see that we’ve made progress in that area aside from the war?
Andrew Pryma: Let’s compare how it was in the 2000s and let’s compare 2020. It would be easy to compare. So, back in the day, do you remember there was Gongadze (Georgiy Gongadze – ed.), the journalist? He was just simply killed for investigating.
Brian Bonner: I’ll never forget him. As long as I live.
Andrew Pryma: So, now you see if journalists catch any schemes done by the government, it comes to the surface. And these people are being torn apart completely. So, there is already, I would say, progress compared to what it was 10, 15 years ago. Do I want to say it’s that good? No, but our government will have no choice but to change the system.
Brian Bonner: I agree that there’s progress in exposing. The breakdown is in the criminal justice system: prosecuting, having speedy and fair trials, and actually getting convictions and deterring. Because if you remember Georgiy Gongadze, the person who most people believe ordered his murder – former president Leonid Kuchma. He never faced any real serious investigation, despite allegations, evidence, and the evidence trail that pointed in his direction. And it’s not just that. I can’t name somebody convicted of corruption, of high-scale corruption. Can you?
Andrew Pryma: That’s the biggest problem because our government definitely wants to be a part of the European Union. They will do all the reforms that they are asked to do. However, where are the people who go to jail? For example, there have been so many government officials in the last 12 months who have actually been caught taking a bribe of $3.2 million. And these guys are applying back to those jobs. The people will only believe the government once they see people behind bars.
Brian Bonner: Let’s just run down a short list of the top officials since the full-scale war who have gotten fired with more than a taint of corruption. Where there’s smoke, there could be fire. The Central Bank governor is gone, a prosecutor general is gone, a head of SBU, the security service of Ukraine is gone, and deputy head of administration Kyrylo Tymoshenko is gone. But now they put him back in defense procurement. It’s not an encouraging sign.
I know you’re very passionate about that because you’ve written about it. You recently had a story, which I highlighted. We highlighted the top-level corruption, where vast amounts of money get stolen, illegal killings, and so forth. But you had something close to home. Can you relate to that? It’s little, but it shows that it even gets to your house.
Andrew Pryma: I live in the center of Kyiv, in the Bessarabska area. I admire the architecture. It’s interesting because I live in an old building that was built in 1911. Back in the day, when it was the USSR, those apartments were given to the people who used to be government workers or professors. So, famous people and people who actually deserve apartments like that.
My neighbor, right behind the wall, was a very old lady. She was a professor, a very intelligent person. We spoke from time to time. I have lived there only for two and a half years. She just recently died, and she never had a family—she never had children. As neighbors, we helped her sometimes, like taking the trash out or buying the pills.
She died, and the only relative she had was her second cousin. So when the police came, they took the body out of the apartment, all the formal staff and the lady, who is her second cousin, who inherited this apartment, she never received any documents from the police, no death certificate, nothing. She’s been knocking on the doors of that police station, and she has never received any documents. Two weeks ago, random people broke the door and started remodeling. We approached them, and I asked: excuse me, who are you? Do you have any documents for this?
Brian Bonner: You own the apartment?
Andrew Pryma: Yeah, sure. That is no problem. We would love to welcome new neighbors. Please welcome. But do you actually know this lady? Because we knew the relative of the lady who died. She was like, I don’t know, I don’t know what you’re talking about guys, we didn’t sell anything, I couldn’t even register the inheritance papers or whatever.
And they said, look, don’t put your nose into somebody else’s business. Everything’s taken care of, and the cops know what’s happening here. I was like, what do you mean? So I called the police station, and it was like, look, just don’t put your nose into somebody else’s business. You have been warned. And I was like, Jesus Christ, this is 2024 in the middle of the war. This is the center of the capital. And basically, these guys say: we’ve been doing this for 20 years, and we know how to do it. Just don’t get in the way.
Brian Bonner: So it looks like officially sanctioned theft with threats behind it and police support. Well, that is really unfortunate because I like your conclusion. If we don’t beat this corruption, and most Ukrainians want to beat it, we’re not going to have that golden era of investment that you see.
Andrew Pryma: I think not even the war stops the investors. Ukraine’s corruption level is stopping investors. because the war will end at some point. And we will be at the point when the investor comes, and he’ll be alright.
At the same time, I spoke to many foreign companies that are actually doing business in Ukraine. They said, look, when you do everything according to the law, in the last 10 years, we haven’t had any problems. If you pay taxes the way you’re supposed to pay them, you’re not looking for any ways to avoid paying taxes. It’s like the United States, and I love its politics. I mean, look, if you don’t pay taxes, you’ll go to jail.
Brian Bonner: Yes. But we have such a sophisticated level of corruption that we actually legalize tax breaks. The lobbyists put in by law are exempted from this tax and that tax. So America’s politics, which I’ve come to hate now because of what’s going on in Ukraine, is becoming a victim of it. It’s different. Here, it’s more brazen. It’s sort of easier to understand in a lot of ways.
Andrew Pryma: Definitely. I agree with you, a hundred percent. I will say this on a very simple level: A regular cop is involved in corruption. I mean, those old levels are corrupted. Not as much as back in the day because there are already ways of prosecuting them, but they still need to be put in jail.
Brian Bonner: So we have a long way to go; we both agree on that. You also recently had another really insightful editorial because you went to America and you went back to Ukraine. We have another crisis: a demographic crisis. A couple of episodes ago, I had the latest study showing that most Ukrainian refugees, 5 million living abroad, will probably not come back.
The Europeans are in no hurry for them to come back. They’re extending the legal permits to stay. Can we get them back? And how serious of a problem is it if we lose these 5 million people, a big share of them are women of childbearing age.
Andrew Pryma: I have a few views on that. Everything is in the hands of the government, I agree. From my personal experience, when you immigrate during the first year, you are still missing your home. In the second year, you start getting comfortable. You got a better job. You got a better car, and you’re safe. There is no corruption. So you feel like, all right, not that bad. I still miss my relatives and friends and my hometown, but I’m okay right now.
When you get to the third year, your roots are getting deeper and deeper in the soil. Right now, it’s a pivotal moment: the third year of the war. This is when, I would say, probably 50% of the people will most likely stay.
However, what people? If you are, for example, well-educated, know the language or can learn the language, sooner or later, you’ll get a good job. But most people look at their jobs, cleaning, washing, and doing dishes. When somebody was working here, for example, in Kyiv or Zhytomyr, maybe in some kind of a store, selling books, and now she’s mapping the floor, she’s happy about that?
Brian Bonner: So it’s not a lost cause?
Andrew Pryma: It’s out of thing that all of the people are going to stay. But at the same time, to attract as many people as possible back to Ukraine, our government should create conditions for people to actually make these thousand dollars because people will think: Let’s do the math.
You know, I love numbers. If you go to Poland, you will make a thousand dollars. Out of this thousand dollars, you will be $500, $600 for your apartment. Because, for example, when you are with your child, you can’t just rent the room, you spend $500 on that. Then you spend a couple of hundreds on food, this and that. People realize they spend all their money just to get by.
Here in Ukraine, okay, she wasn’t making that much money; she was making probably $500, but she had her own apartment. She doesn’t have to pay for that. She knows everything. I’m not talking about Germany where people on average make 1500 euros, 1800 years. We talk about the average salary that people have in Poland. For example, $900, a thousand dollars. If people who come back have an opportunity to make as much money as possible, most of the people will return.
I’ve seen the people who returned, but then they said, look, despite the war, I just love Ukraine. I love my friends, I love my family, and I want to be around my people. But at the same time, we need to make money. The government should create jobs. if the reconstruction starts at full speed, in 2027, there will be a huge need for labor and people. Instead of working in Poland at the construction site for $1,200, they’ll be happy to consider an option to work in Ukraine.
Brian Bonner: That’s encouraging, but it depends. You have also written favorably about Zelensky compared to Poroshenko. Do you still feel that way?
Andrew Pryma: Many people ask me, what do you think about Zelensky? First of all, I’m not a person who can or should judge. I`m just going to give you my opinion. I’m not a big fan of his office and what President Zelenskyy’s office is doing, but I’m pretty sure that Zelenskyy is the right president for this time.
And I think nobody ever, not a single Ukrainian leader ever screamed out loud and has been fighting for aid. “Please help Ukraine, please help Ukraine, please help Ukraine”. So this guy reached out to all the leaders around the world. He traveled to all the countries around the world, and this is all that helps us survive today.
We understand that we didn’t get the expected aid from the United States. It will come sooner or later, but he has done a tremendous job, of reaching out to the world. He actually promoted Ukraine as a brand. If he wins this war, I think he will be remembered for life.
Brian Bonner: The point was well taken. And you see, we’re veering off business news. That’s another reason why I like Ukraine Business News. It gives you the business news, but it understands that there’s a whole world out there, including politics. What are your plans for Ukraine business news? Because we are starved for business news, and we’re starved for investment. I know the Kyiv Independent has Liliane Bivings, she is a good business editor. She worked for me when I was at the Kyiv Post. But what are your plans? And it’s not just a five-day-a-week newsletter. I know you’ve got expansion plans.
Andrew Pryma: Correct. So, compared to pre-war times, we struggle with business news. We have no choice but to cover war topics and other topics sometimes. But we’re still trying to ensure that our magazine has mostly business and investing news. At the same time, we took an extra step and branched out from Ukraine business news to the Ukraine business network, or, as we call it, the UBN network.
I was lucky to have an English business partner. He’s actually American, but he lived and worked in the UK for a long time. His name is Mark McNamee. He joined me as a partner at the UBN network. Ukraine Business News has a huge database of businesses, companies that are doing business in Ukraine, and companies that are interested in the Ukrainian market. However, these companies need more tools to do due diligence or understand our market. The idea was to connect those businesses and give those tools that will help them actually enter this market sooner.
The general idea of the UBN network is to create a close-knit business community to which our team will add value by providing tailored monthly and quarterly briefings and reports. We have live events per year at the Parkway Center. We also produce 12 monthly reports, four quarterly reports, and four benchmarking surveys. Our latest benchmarking survey was cited by The Hill magazine, which is huge exposure.
What are UBN network reports? Our reports link the macro environment to the micro and help businesses understand and manage the impact of microtrends on their businesses with the right strategies and tactics. Many international companies do business in Ukraine. They have their headquarters in London, Brussels, New York, and other places—any country you name. We have hundreds of businesses working here.
But the picture is very distorted. What is actually happening here and what do they see on TV? Because, you know, this is your industry, we love to find something triggering. Sometimes, we exaggerate things a little bit to bring attention. So the picture is very distorted. And when the headquarters contacts the local offices they say: oh, by the way, our competitors expanded. What do you mean by expanding? You’ve been bombed on a daily basis!
So our reports talk about the real stuff, what is happening in the market. Usually, businesses share reports with headquarters outside of Ukraine to get a third-party objective and to help them understand the business environment on the ground better. Then, it actually helps them make decisions. We’re not just connecting people in businesses through our live events. We’re also providing lots of research, like economic outlooks so businesses have all the tools to plan for the future.
Brian Bonner: Ambitious filling a void. You know, when my team and I got fired from the Kyiv Post, we had put out a weekly newspaper for 26+ years. And they killed it immediately after firing me. Is print dead? Do you foresee Ukraine Business News going into print?
Andrew Pryma: We actually had a printed version. We used to call it Quarterly Opportunity Reports. And that was a printed magazine. It was issued once a quarter and dedicated to a specific industry, energy, for example. We gathered as much information as possible, and we’ve done as many interviews as possible, just to dedicate this hundred-page issue to a specific industry.
We are looking forward to that. And we would love to have a well-known Brian Bonner as part of that soon. So this is the idea, our plans. And we are pursuing our plans no matter what. And again, people were like, are you crazy? I’ve seen what’s happening in the offices of all these companies who are working in Ukraine. After each event, our UBN network and our UBN community met with each company that came to our event. We know businesses personally.
We know who is doing what, how they’re doing, what they’re struggling with, and what they’re actually looking forward to for the next year or two. We’re not just giving the information; we’re gathering it to create our reports. My point is that I go to all these offices, and I see those little tables with magazines, and I see how they are totally worn out. Why? People are actually reading them. People are actually reading those magazines, and there is a huge opportunity for them.