This is an audio transcript of the FT News Briefing podcast episode: ‘Oleksandr Gryban: Investing in Ukraine’s future’

Marc Filippino
Good morning from the Financial Times. Today is Friday, March 31st, and this is your FT News Briefing.

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Former US president Donald Trump has been indicted and the war in Ukraine is raging on. But one official in Kyiv is dreaming of the future and selling that dream to investors.

Oleksandr Gryban
Ukraine is still a country of huge opportunities and whoever comes first, gonna get the most.

Marc Filippino
Plus, we’ll get a taste of the FT’s seven-month investigation into Northern Korean oil smuggling networks. I’m Marc Filippino, and here’s the news you need to start your day.

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Donald Trump was indicted by Manhattan prosecutors yesterday. The nature of the charges are not yet public, but he’s now the first former US president to face criminal charges. The case comes after a grand jury in New York heard evidence that Trump ordered payments in 2016 to porn actress Stormy Daniels to cover up an alleged affair. Trump also faces a civil case brought by the New York attorney-general’s office, and he’s under investigation in the state of Georgia over his alleged attempts to overturn the 2020 presidential election.

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Russia continues its brutal war on Ukraine with no end in sight. Still, officials in Kyiv are pressing ahead with postwar reconstruction plans. The European Commission and the World Bank estimate the cost to rebuild Ukraine will be about $350bn. I’m joined now by a Ukrainian official who has the job of attracting investors for a future rebuild: deputy minister of the economy, Oleksandr Gryban. Thanks so much for joining us. 

Oleksandr Gryban
Hello.

Marc Filippino
So, Oleksandr, what are you doing to reassure investors that they’ll get a return on their investment?

Oleksandr Gryban
In particular, we are actively exploring the route of the war risk insurance or political risk insurance. So the way to do this, to set up the special trust fund, which will be filled in by the, essentially by the donations or like very cheap and long loans provided by our partners, primarily the G7 countries. This trust fund will serve as the first loans guarantee for the reinsurance of the risks of those operators that’s gonna be providing such a service, such a policy.

Marc Filippino
So that’s one key concern that you’re addressing. Another is the possibility of corruption. And in the past, Ukraine has had a reputation for corruption. Has that come up in talks with investors and how do you respond?

Oleksandr Gryban
It is one of the core points of the discussion all the time. And recently you could have noticed that anti-corruption infrastructure is actually strengthened. But at the same time, we want to create the infrastructure together with donors as well and the rules of the game, the preventive measures, they would not even enable the potential corruption. So, for instance, that’s where we’re discussing a very clear and transparent procurement platform, an instrument that could be based on the World Bank procurement system, slightly updated. So we, it is in our interest to give the maximum comfort to the donors and also to take the responsibility off of us. 

Marc Filippino
So far who’s signed up to invest in the reconstruction of Ukraine?

Oleksandr Gryban
Well, mostly these are international players that were already present in Ukraine or those that were considering Ukraine, but stopped considering because of the war. But now, when they see that these financial instruments are becoming available for them, they actually start getting into due diligences and the audit processes. So we do see that the process is moving.

Marc Filippino
But have any new international investors signed on or made commitments?

Oleksandr Gryban
No, no such cases so far. But we know that they are considering that they already are studying the opportunities. And the investment process is basically very time- and effort-consuming. So we just encourage the investors to approach us to explore the opportunities to see what is there. And we have really a lot to offer with a decent return rates. And once this war risk insurance is there, you’re pretty much safe.

Marc Filippino
Oleksandr Gryban is Ukraine’s deputy minister of the economy. Thanks so much, Oleksandr.

Oleksandr Gryban
Thank you. Thank you very much, Marc.

Marc Filippino
Now for some perspective on this ambitious project, I’m joined by the FT’s Europe editor, Ben Hall. He’s in London and just got back from Ukraine this week. Hey, Ben.

Ben Hall
Hi.

Marc Filippino
So you’ve reported on reconstruction. You’ve also met Gryban. You know, what do you think, after hearing our interview with him?

Ben Hall
I think what’s really striking is the extent to which he and the Ukrainian government are still pushing at this juncture for foreign investment to come into the country, because to many people it seems quite unrealistic, frankly. The war is rumbling on. The economy’s in a bit of a mess. It doesn’t seem to me to be the right time to be pushing for fresh inward investment, but they are very anxious to try and kickstart some projects that will drive growth and maybe instil a bit of confidence in the Ukrainian economy.

Marc Filippino
So what do you make of Ukraine’s efforts to reinsure investors?

Ben Hall
Well, what Gryban and colleagues are trying to do is persuade international financial institutions and the big donor countries to put together a fund that would, I think, in effect, buy reinsurance so that inward investors would be covered for war risk damage, damage to the facilities, damage to their staff, damage to lost business. And, of course, it pays to get in early when assets are cheap. I think quite possibly what will happen in the shorter term is it will be domestic investors who will start to invest again, who know the country best and who can see the real opportunities. And obviously, if they can benefit from some kind of international reinsurance scheme that could help get capital flowing domestically, which would also help quite a lot in the short term.

Marc Filippino
Are Gryban and his colleagues on a fool’s errand?

Ben Hall
I don’t think it is a fool’s errand because I think you will find foreign companies that will want to get in on the game quite early. But it, as ever, it’s gonna be a question of timing. And I suppose what he may . . . He may take the view that, you know, investment projects will take months, if not years, to come to fruition. Let’s get the ball rolling now.

And I think it’s also about sending a message of a kind of resilience essentially to the outside world that they’re thinking about a long-term prosperity and development of their country and not just short-term survival.

Marc Filippino
Ben Hall is the FT’s Europe editor.

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For the past seven months, FT correspondents have been investigating how North Korea has been smuggling oil into its country to support its military and nuclear weapons program. A video of their investigation just dropped on FT.com. 

Video clip
Gangsters. Ghost ships. Oil traders.

Marc Filippino
That’s the FT’s Christian Davies. He’s one of the correspondents on the report.

Christian Davies
What’s so brilliant about this story is we don’t just tell you about it. We show you. We show you the routes of the ships that go from Chinese waters, pick up oil from intermediary ships that have come from a port in Taiwan and then sails up the coast and into North Korean waters. Not only do we show the ship going to North Korean waters, but actually we have satellite images showing the cargo being unloaded into North Korea and even being transported to a military training ground outside Pyongyang, being used to fuel trucks, which then go to a military parade in Pyongyang.

Marc Filippino
Christian and his colleagues also uncovered a cast of colourful characters.

Christian Davies
A gold trader from Hong Kong, a racing car driver from Macau, a gambling tycoon associated with the Triads — we show you that they were business partners. And we also show you documentation, which is incredibly rare, which is showing that a North Korean national — we even have his passport number — and showing that this is part of a very complex series of networks which bind Chinese criminal gangs to North Korea and its oil procurement and wider financing operations. And it confirms what many people have suspected but haven’t necessarily been able to expose to the degree that we have this week.

Marc Filippino
That’s the FT’s Seoul correspondent, Christian Davies.

The FT’s investigation into North Korean oil smuggling was done in collaboration with the Royal United Services Institute. In our show notes, you’ll see the links to the visual story as well as a video.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back next week for the latest business news.

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The FT News Briefing is produced by Sonja Hutson, Fiona Symon and me, Marc Filippino. Our editor is Jess Smith. We had help this week from David da Silva, Michael Lello and Gavin Kallmann. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s global head of audio, and our theme song is by Metaphor Music.

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