Secretary-General of the International Chamber of Commerce: the UN is the best-equipped group to negotiate the food corridor from Ukraine

The secretary-general of the world's largest business organisation, John Denton, talks about the food crisis, the role of the international business community in supporting Ukrainian entrepreneurs during the war, and the place of Ukraine in the post-war world economy.

The war in Ukraine seriously affected the world economy and disrupted supply chains. The effects of the Russian invasion are already being felt in most developing countries. Some East African countries are on the brink of starvation.

The business also feels the echoes of this war. Large international companies are suffering losses because they have to withdraw from the Russian market. Small and medium-sized businesses are suffering from the effects of the energy crisis and supply chain disruptions.

Not surprisingly, the world's largest business organisation, the International Chamber of Commerce (ICC), has decided to join in resolving the conflict. It includes about 50 million businesses from 170 countries. ICC is the only business organisation that has observer status in the UN.

At the beginning of June, ICC Secretary General John Denton had an official visit to Kyiv. He aimed to focus the attention of the Ukrainian government on the need to support Ukrainian entrepreneurs.

EP spoke with Denton about the ICC's assistance to Ukrainians and local businesses and the opportunities that have opened up for Ukrainian companies since the start of the full-scale aggression.

How to solve the food crisis? Why are some Western companies still operating in the Russian market, and what could be the place of Ukraine in the post-war world economy?

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—  You came to Ukraine with a five-point plan for resilience and solidarity, which, as far as we know, you discussed with the Ukrainian authorities. What are the results of these discussions? 

So, the reason I am in Ukraine and visiting Kyiv today is to enable business here. What I am worried about is that we are not providing enough focus and attention to keeping business going, and keeping the private sector functioning in Ukraine.

I fully understand the prime focus is on national security and defence, but an important part of any strong nation is a strong economy. And keeping the economy as strong as possible requires an active, vibrant, and sustainable private sector.

In Ukraine, so much of the private sector is involved in the value chain of food production. So it is a global interest. And I wanted to encourage the government to put focus on strengthening the economic front by working with the private sector.

I also wanted to draw the attention of the Ukrainian government to a major intervention we have made - the creation of the ICC Centre of Entrepreneurship for Ukraine. It is designed to support and provide skills and capability to the refugee community. We want them to create income streams for themselves and have some level of support.

Because if you want to keep people motivated, if you want to keep morale high, you're going to have to be certain they know that efforts have been made to look after their families.

And we are also using the entrepreneurship centre to provide help to SMEs here. Skills they need to work, how they can access more support, creating a model to help the Chambers of Commerce to continue to function. So that's been my other aim here.

The third aim is to stop talking about preserving the private sector, but to revitalise the economy of Ukraine moving forward. And in that context, how can we effectively support the rebuilding and the revitalization of the Ukrainian economy? What sectors should we look at, and what needs to change? So we focus on that.

— This program you have just mentioned, helping Ukrainians to start a business abroad?

What we are doing is giving them tools, giving them access to mentorship to do that.

 — So this programme is more about education: you teach people how to do business.

Teach them how to do business, mentor them, and give them the connectivity. We are building the world's largest entrepreneurial ecosystem. And we provide these individuals with access to the global ecosystem we have. The same thing is true for SMEs in Ukraine.

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— Have Ukrainian authorities asked you about any specific assistance that your organisation can provide to help the Ukrainian economy?

The critical piece we are working on is about ensuring access to trade finance, working capital, etc. If we are going to help the economy and small businesses' ability to export, they need to have access to trade finance. There is not enough of it available.

This is an area where the Ukrainian government would like our support in helping foreign governments, international financial institutions, and development banks to provide the necessary support, necessary lines of credit, and the necessary insurance to remove the risk from people doing financial transactions with SMEs in Ukraine.

The other issue is recognizing the diaspora, the refugee group as an economic unit as well. And how do we ensure that this economic unit is not lost to the Ukrainian economy? There are a lot of good people with skills who are not here. How do we help continue to develop those skills?

— You said that the ICC is also helping people to start a business in Ukraine. Can you tell us more about this aspect?

It is about how to build a digital business model. Digital business is not capital intensive. It's about ideas and access to the digital platform. But one of the challenges is that not everyone who has a good idea knows how to make a business out of it.

 — A lot of Ukrainian companies are now having problems because they were highly dependent on Russian and Belorusian markets. Can the ICC help them find new markets in the West?

Yes, absolutely. We can help to find new markets, a well as to reveal the demand.

And that's why we think it's really important to keep the support and visibility and effectiveness of regional Chambers of Commerce, because they are really close to these businesses. And what we want to do is to give them a direct line.

We also arrange twinning between Chambers. We're taking a Chamber of Commerce here and twinning it with the Bogotá Chamber in Colombia. That helps to shift the mindset and create an opportunity. It's quite a novel.

— Many countries, including the EU, have lifted all their tariffs and other trade restrictions for Ukrainian companies. Do you see any obstacles for Ukrainian businesses to benefit from these measures, besides logistical problems?

First of all, it's understanding the market you are going in. Getting market intelligence about how you do business in a market you have never been to before requires some help and support. And we can help through the local Chambers that are part of the ICC.

So if you want to do business in Bogotá or Cartagena (a city in the north of Colombia - EP) we can link up the Ukrainian business through the Bogotá Chamber in the capital of Colombia as well as through the Cartagenian Chamber, in order to provide some experience and opportunity so they can learn quite quickly. So it is more about experience and getting a necessary understanding of how business works.

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— Let's talk about the food crisis. We know that the international community is making efforts to unblock Ukrainian ports. But so far there is not much good news. If Ukraine fails to export its agricultural products, what could be the consequences for the world? Could other countries replace Ukrainian wheat, corn, and other products?

Oh, devastating. I mean, people will die from a lack of access to food. It's just a fact. Make no mistake: the consequences are significant.

Social unrest is very bad. We may see governments fall. We have seen it before, during the Arab spring. Therefore, we are going to double our efforts to create the only realistic way of reintroducing Ukrainian food products fully into the global economic food system, which is access to the Black Sea route by opening up Odesa. And that will only happen if enough pressure is put on Russia to allow this and open it up, demining the area and protecting ships. Because no other logistical rearrangement can provide the quality and quantity that the world requires.

— If we look at this problem from a different point of view: what will be the consequences for Ukrainian companies if they fail to export their food products abroad? Is it possible that because of war, Ukraine could lose its traditional markets?

That is always a risk, because other countries can increase their production.

But I think that a better way of looking at it is in terms of a change of behaviour on the part of Ukrainians involved in the food chain. They will start planting different types of crops, they will start creating opportunities to move goods in smaller amounts. So it will be a fundamental rethinking of the way in which the food value chain operates.

The consequences in the short term will be devastating for the world, because of the lack of access to food. Because you cannot quickly reorient the whole global food system.

At the same time as this is happening, countries are putting export restrictions on food. Because of concerns about lack of access to food, a number of Asian countries will put export restrictions on rice. This further compounds the problem.

So Kyiv's focus has to be on opening up the Black Sea, opening up access to Odesa, and allowing shipping of food products out of Ukraine.

— I know that you have had some communication with the UN Secretary-General about unblocking the Ukrainian ports. Do you have any feedback? And how successful has this communication been?

I have discussed this issue with Mr Guterres. I think that the UN is the organisation best equipped to negotiate and create this humanitarian food corridor.

I think there needs to be a change of focus. This is going to hurt developing countries. We need to ensure that the consequences of this happening are better understood in Moscow. It is not in the long-term interest of Russia to disengage and to be effectively detached from the global developing world.

I think that it is in everyone's interest for these products to be exported. And I actually think that it's in China’s interest to reflect this in their discussions with Russia as well.

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— Can the ICC communicate about this case with the Chinese government directly through your businesses?

The reality is that most Chinese businesses are actually state-owned corporations. Their level of involvement with the state is very high. So we're actually talking with the Chinese government. And we also talk to them because China is part of the ICC.

— But still, China is not making any efforts to unblock Ukrainian ports.

To be frank, we don't know. And I think this is an area where it will be good to encourage China. It is not a case of the advanced economies telling China to do this. It's really for developing countries to engage with China, which sees itself as an important player in developing countries, in global interests. Developing countries need to tell China and help China to understand how important this issue is to them.

— After the war, Ukraine's industry will be severely damaged. On the one hand, this is a significant loss for the economy, and on the other hand, it is a chance to build a new industry that will be competitive in today's world economy. In your opinion, what could be the place of Ukraine in the modern economy?

One of the major global issues everyone is grappling with is a transition to the green economy; the second is the one we've talked about, access to food, and the third is the supply chain.

You might need to think about different forms of engagement in the agricultural value chain. Some smaller sectors are moving up, such as poultry. This means that you can create the same value with smaller amounts that can be shipped easily.

People are now worried about the global supply chain's effectiveness. As people start thinking about the recalibration of the European supply chain, what will be the role of Ukraine in those supply chains?

One thing I find amazing is that the Ukrainian government, particularly your economic ministry, is thinking about these issues.

— Since the 24th of February, Ukrainian authorities and activists have demanded that Western companies withdraw from the Russian market. So far, almost 1,000 large Western companies have decided to leave Russia or significantly reduce their activities there. However, there are still those who continue to work and pay taxes in Russia. Why do you think it is so difficult for some companies to leave the Russian market? How can we accelerate the withdrawal of Western companies from the Russian market? 

I think part of this problem is that a lot of companies can't work out the best way to disengage and do the least harm. A lot of companies have employees there. If they just withdraw, the employees will simply lose their jobs. Is that being responsible?

So they are trying to work out the best and most ethical way to form their final view. There is no structured way of thinking it through. But we are working on this. We think it is very useful to help develop this framework.

It's not because people are not concerned, it's not because people are putting profits above their purpose. It's because they generally try to work out the best way to balance what they see as ESG and how they can function in the community in which they operate.